Skip to main content

Full text of "Reusing railroad stations : book two : a report"

See other formats



The National Endowment for the 
Arts was established by Congress in 
1965 to foster the growth and devel- 
opment of the arts in the United 
States, to preserve and enrich the 
nation's cultural resources, and to 
provide opportunities for wider ex- 
perience in all the arts. 

National Endowment for the Arts 

Nancy Hanks, Chairman 

The Architecture + Environmental 
Arts Program was created to sup- 
port exemplary design efforts and to 
stimulate active public interest in 
the quality of the built environment 
through grants to individuals and 
nonprofit organizations, in the fields 
of architecture, planning, landscape 
architecture, interior and industrial 

National Endowment for the Arts 
Architecture + Environmental Arts 

Bill N. Lacy, Director 

Educational Facilities Laboratories 
is a nonprofit corporation estab- 
lished in 1958 by The Ford Founda- 
tion to encourage and guide con- 
structive changes in education and 
related facilities. 

Educational Facilities Laboratories 

Harold B. Gores, President 
Alan C. Green, 
Executive Vice President 
and Treasurer 


R/ "^OAD 



This project is supported by a con- 
tract with the National Endowment 
for the Arts in Washington, D.C., a 
federal agency. 

Copies of this publication are avail- 
able for $4.00 from efl, 850 Third 
Avenue, New York, N.Y. 10022. 

Copies of the first volume of Reus- 
ing Railroad Stations are available 
from EFL for $4.00 prepaid. 

Library of Congress Catalog No. 

First Printing, September, 1975. 
© 1975 by Educational Facilities 
Laboratories, Inc. 


Foreword 4 

Introduction 5 

Nonprofit organizations e 

Pittsburgh 6 

Savannah 6 

Baltimore 9 

Hartford 10 

Duluth 11 

Yuma 15 

Transportation centers le 

Washington 16 

UMTA 16 

San Diego 16 

Seattle 18 

Cincinnati 20 

Dallas 20 

Commercial developers 22 

Los Angeles 22 

St. Louis 24 

Orlando 25 

New London 26 

Principles of successful project development 23 

Controlling costs in reuse development 34 

Reducing acquisition costs 34 

Reducing renovation costs 36 

Reducing operating costs 36 

True financing costs 37 

Market analysis 41 

Summary guide to financing and analysis 42 

Municipal governments can help 43 

Indianapolis 45 

Foundations can help ^^ 

Federal programs can help "^^ 


Last year Educational Facilities Lab- 
oratories and the National Endow- 
ment for the Arts published a book 
and ran a conference on reusing 
railroad stations. The response to 
each from people involved in trans- 
portation, conservation, real estate 
development and urban manage- 
ment was larger than expected and 
greatly encouraging to the spon- 
sors. We found that a lot of people 
want to exchange and seek informa- 
tion about putting old stations to 
new uses. Hence, this second publi- 
cation, which tells a little more about 
some specific stations, explains the 
business of development for readers 
without experience in the financing 
of building conversions, and lists 30 
government agencies that can give 
financial help to commercial and 
nonprofit groups working to reuse 

Reusing Railroad Stations Bool< Two 
extends the information published 
in Reusing Railroad Stations. Some 

of the text is taken from the confer- 
ence held in Indianapolis in July 
1974, some is an extension of what 
speakers said at that conference, 
and some is an update on activities 
at stations. We have tried to avoid 
repeating the previous publication; 
new readers are referred to that 
book for more background on some 
projects discussed here and ac- 
counts of several other stations that 
have been successfully reused. 

In addition, because so many peo- 
ple have expressed a need to learn 
more about the business aspects of 
conversions, several chapters of the 
book explain some of the principles 
of financing development. 

This new book, as well as the prior 
one and the conference, was funded 
by the Architecture + Environmental 
Arts Program of the National Endow- 
ment for the Arts. 



Finding new lives for old railroad 
stations is no longer a "good cause" 
that is waiting around the corner. 
There are enough successful com- 
pleted conversions to convince the 
most skeptical that it's not the lat- 
est advocacy fad but a business ven- 
ture that can at least be self-sup- 

Stations are being conserved, not 
preserved, so that the splendors of 
their architecture can be put to use 
while being enjoyed. (The distinc- 
tion between conservation and pres- 
ervation is that the former keeps 
something alive, the latter ensures 
it remains after death.) Examples of 
small-station conservation projects 
abound. Many are now privately 
owned antique stores, gift shops, 
homes, or studios. Not as many mid- 
dle size stations have been con- 
served because their location is far 
more critical than the small build- 
ings, and because they require more 
money to buy (or lease) and convert 
to a new purpose - difficulties that 
usually require concerted action 
and inventiveness to overcome. But 
there are a number of successful 
projects. Then there are the big sta- 
tions, terminals that require a big 
business approach before anything 
can be done for them. A few have 
been conserved, and they provide 
exemplary directions for what can 
be done for those large stations 
whose fate is now in abeyance. 

In recent months, the biggest boost 
to the reuse of stations came from 
Congress when it enacted legisla- 
tion to fund urban stations listed on 
the Historic Register which could be 
activated as road and rail transpor- 
tation centers with connections to 
airports — called multimodal or in- 
termodal centers — combined with 
civic and cultural uses. This doesn't 
help organizations that want to con- 

vert suburban or rural stations, but 
there are smaller public and private 
treasuries available for these if they 
meet the right criteria. 

Also proving helpful to urban sta- 
tions is the change in the Federal 
Highway Administration regulations 
permitting some of its funds to be re- 
leased for aid to other forms of 
transport, including rail. However, 
it's not only Washington money that 
is going into station projects. The 
nongovernment sector, both com- 
mercial and nonprofit, is putting sta- 
tions to work, albeit in different roles 
from yesteryear. It's all part of the 
remarkably wide interest in convert- 
ing all kinds of old buildings for 
commercial and cultural uses. The 
days are over when sound structures 
were torn down simply because they 
represented an outdated style of life. 
The old parts of cities are coming 
back into use, and for many people 
they are friendlier and more inter- 
esting than newer, sleeker central 
business districts. 

Some reused stations are described 
in the following chapters: many 
others are listed in Historic Railroad 
Stations, an inventory published by 
the National Register of Historic 
Places. It can be obtained from the 
Superintendent of Documents, U. S. 
Government Printing Office, Wash- 
ington, D. C. 20402. 


There is no surer way for a historical 
society to give credence to its advo- 
cacy of reusing old buildings than 
for it to develop a project itself. One 
man who firmly believes in this ap- 
proach is Arthur Ziegler, president 
of the Pittsburgh History and Land- 
marks Foundation, who has his eye 
on a Pittsburgh railroad station and 
its 30-acre site that could be con- 
verted to retail stores, theaters, res- 
taurants, offices, housing, and other 
enterprises that would greatly in- 
crease the amenities of the city. 

Ziegler says, "If a project of this size 
can be made to work, the Landmarks 
Foundation will become an even 
stronger body in the city than it is 
now. We'll be able to do more be- 
cause of greater influence and visi- 
bility. And, of course, if this project 
succeeds we will generate income 
for our neighborhood conservation 
programs. If an organization of the 
stature of Pittsburgh's foundation 
can reap an income from profits of, 
say, $1 million a year, it will have an 
immense leverage to go out and use 
the money for other worthwhile re- 
use projects in the city. 

"When the foundation first talked to 
the railroad company we found them 
assembling a consultant's report on 
what to do with their property. The 
consultant had recommended some 
historical development similar to the 
foundation's preliminary plans. But 
we needed more time to investigate 
what we wanted to do — and what 
we could do - so we negotiated to 
obtain not an option to the property 
but the right to negotiate exclusive- 
ly. Then, by a happy coincidence, 
another foundation came to us be- 
cause it was interested in develop- 
ing a mixed-use commercial ven- 
ture, so we were able to work with 
substantial support. 

"Next we worked out a general 
space allocation and asked a con- 
tractor to make a rough cost analy- 
sis. We retained an engineer, a con- 
tractor, a real estate man, and an 
architect. This team was asked to 
confine its work to three of the sev- 
en available buildings because we 
wanted to do the preliminary analy- 
sis in a month. We felt that that much 
study would enable us to develop a 
good feel for the project so we could 
decide if we wanted to go ahead 
or not. Unfortunately, the analysis 
showed that costs, particularly 
maintenance costs, would be too 
high for us to go ahead with the 
project as first conceived. So now 
another study is underway to see if 
the land that goes with the build- 
ings could be used to create a new 
town with a clearly historic heart." 

Savannah, Ga. 

Central of Georgia Station 

When the Savannah Chamber of 
Commerce wanted to move its visi- 
tors' center into premises with larg- 
er parking facilities it was offered a 
railroad station built in 1860 at the 
spot where Casimir Pulaski fell in 
the American Revolution. It's a satis- 
fying home for an organization that 
benefits from $50 million of tourist 
business a year from visitors who 
are in Savannah to see the restored 
historic buildings in the center of 
the city and along its water front. 

The Historic Savannah Foundation 
discovered that when passenger 
service was discontinued at the 
Central of Georgia Station, the own- 
ership of the property would revert 
to the city. So, the city took over the 
empty station and gave the cham- 
ber six months in which to raise 
$200,000 to reclaim and restore the 
building. The C of C raised the mon- 
ey through pledges that will be hon- 
ored over three years, and bank 
loans to cover the interim period. 
(Raising money isn't too difficult for 
an organization whose members in- 
clude three bank presidents.) 

Unfortunately, between first esti- 
mates and completion the project 
suffered from the usual inflation, 
and the final costs were closer to 
$300,000. But this covered reno- 
vated heating, lighting, and plumb- 
ing, a new roof, and refurbishing for 
two floors totaling 8,800 sq ft. 

Ownership is retained by the city, 
and although the C of C paid for the 
remodeling, it isn't paying any rent. 
On paper, its 10-year lease costs 
$25,000 a year, but this amount is 
credited by the city against the 
work done in renovations. A new 
lease will be negotiated after the 
10 years. 

Central of Georgia Station 

Ground floor 

Upper floor 


^\ u 




itaifj^^^^": ~ 1 



^^|g^^t.^lf :^-; 


Train museum behind station (above) is a few steps below visitor's center (below). 

An elegant visitor's center for tourists to obtain information about Savannah is located in the former 

Savannah, Ga. 

Central of Georgia Station 

Baltimore, Md. 

Mt. Royal Station 

One interesting station conversion 
is in Baltimore where the Maryland 
Institute, College of Art, occupies 
the former Mount Royal Station. De- 
tails of this project were recorded in 
efl's first railroad station book, but 
at the Indianapolis conference the 
college's president, Eugene W. 
Leake, told of some of the "humor- 
ous" problems he has experienced 
with the conserved building. 

Leake said that since the school 
took occupancy, in 1966, the main 
threat has been from planners, par- 
ticularly transportation planners. 
"For instance, after we had been in 
the station two or three years, I 
noticed in a newspaper that there 
was to be a meeting in Baltimore on 
the extension of the east-west ex- 
pressway. The article included a 
map that showed the extension 
would pass right through the Mount 
Royal Station building. So I rushed 
down to the traffic bureau and start- 
ed the bureaucratic wheels churn- 
ing again. It took an awful lot of 
talking to convince the traffic de- 
signers that it's not logical to put an 
expressway within 50 feet of the 
main tower of the Maryland Institute. 

"Fortunately that proposal died, but 
it was a battle. And unfortunately, 
it's an idea that keeps popping up 
all the time. Somebody somewhere 
says this is the logical place to put 
a transit route, and because we are 
a nonprofit organization without 
any economic clout, we're an easy 
prey to the planning establishment 
who always insist it's cheaper to go 
through our property than go some- 
where else. 

"Not too long ago, I had a call from 
the Rapid Transit Authority, and I 
knew instinctively what they wanted. 

Representatives came to see us, 
and we listened very politely while 
they described phase two of Balti- 
more's rapid transit plan, which in- 
cluded, obviously, a stop at the 
Mount Royal Station. So I said, 'If 
this station was owned by the Chase 
National Bank, would you have 
asked to use the facility as a public 
transit stop without suggesting that 
you would pay quite a lot of money? 
If they had been talking about $10 
million, I might have moved, but they 
just wanted to use it because it was 
a nice, convenient right of way and 
the stop already had various ameni- 
ties, such as steps and parking. 

"I must say they were gracious 
enough to be embarrassed and said 
that under no conditions would they 
follow through, and that they cer- 
tainly wouldn't threaten us with emi- 
nent domain. However, I discovered 
later that the idea had come from 
the planning department — the very 
people we'd worked with a few 
years ago in the development of the 
college. They seemed to have for- 
gotten we were in the station. 

"I think that eventually rapid transit 
will come. And I'm certain that the 
freight trains are going to continue 
to run next door to us. Right now 
there are about 12 trains a day. But 
when we adapted the station we had 
acoustical and vibration tests made 
and found that the roadbed and the 
station are so structurally sound 
that there's almost no vibration and 
surprisingly little noise. I suppose 
rapid transit might add some noise, 
but I think we can live with it. 

"Trains cause another little prob- 
lem: pollution. Adjacent to our sta- 
tion is a tunnel in which smoke 
builds up — even from electric and 
diesel trains — and then it all billows 
out right on our spot. Fortunately, 

Second Floor Plan 




Third Floor Plan 

we airconditioned the building; 
otherwise our 30,000-book library 
would have long since been eaten 
up by acid. We're still discussing 
ways to get rid of the pollution and 
I think maybe the rapid transit peo- 
ple, without actually planning it, will 
solve our problem. If we don't let 
the rapid transit trains stop at our 
platform, they may build a station 
further down the tunnel and have a 
sort of a shaft to exhaust the fumes. 

"Another problem — unique to the 
reuse of stations — is when you buy 
a station you almost always also get 
a large shed. Our train shed is a 
nearly 800-ft-long steel construc- 
tion. It was built in 1896, it has in- 
credible historic interest, and it's an 
integral part of the site design. Al- 
though the school raised a million 
dollars very quickly to buy the sta- 
tion, we weren't able to raise 
enough money to restore the shed. 
Everybody mistakenly thinks of the 
station as being a unit in itself, and 
the shed covering the freight trains 
doesn't seem too important. So, I 
had a model made showing what 
the station would look like without 
the shed, and, of course, it's utter 

"I'm a romanticist, and I know the 
students are, and the art school 
without the shed would lose its light, 
its vitality, and a great deal of its 
atmosphere. We also use part of the 
shed as an outdoor sculpture area, 
giving us almost 600 feet of space 
for welding and carving facilities, 
including a foundry. Unfortunately, 
the shed is deteriorating fast, and 
we can't afford more than $5,000 a 
year to maintain it. We estimate that 
repairs would cost $80,000, but it 
would be disastrous for us to tear 
down the shed or have it fall down." 

Hartford, Conn. 

Union Station 

The current use of Hartford's Union 
Station is also the same as reported 
in our first railroad station book, but 
its future prospects are now quite 
different. Although the station has 
been in private hands and modern- 
ized for about 10 years, it has never 
reached its full potential, and large 
parts of it have remained empty. 

Now The Knox Foundation, a local 
nonprofit organization, plans to 
lease the whole station from its pri- 
vate owner and develop the space 
into retail stores, restaurants, and 
offices. To do this, the foundation 
will have to relocate the three exist- 
ing tenants, but Amtrak will remain, 
using part of the station for its 
meager train service. 

A foundation attempting to develop 
a profit-making enterprise sounds 
contradictory, but the proposed ven- 
ture complies with the regulations 
governing the activities of nonprofit 
organizations. Such organizations 
are permitted to encourage com- 
mercial activities benefiting central 
city areas that would otherwise suf- 
fer urban blight. The Knox Founda- 
tion is emboldened to develop the 
station because its location. Union 
Place, has recently changed char- 
acter, and stores and a restaurant 
are succeeding in a previously non- 
descript, fallow neighborhood. 

No contracts had been drawn at the 
time of writing, but Knox and the 
station owner had an understanding 
that the foundation will lease the 
station at whatever price is neces- 
sary to get the venture started. This 
could mean $1.00 a year, but, in 
addition, the owner may receive in- 
come from the commercial and re- 
tail tenants based on a percentage 
of their income. 


Duluth, Minn. 

Union Depot 

It's no small feat to parlay $25 into 
$2.5 million, especially when the 
transaction is started by four per- 
sons who previously hadn't man- 
aged anything bigger than their own 
personal finances. But it happened 
in Duluth, Minn., where the former 
railroad station now flourishes as 
a center for several cultural activi- 
ties with a new theater being built 
alongside it. 

The renaissance of the station into 
a cultural center has had a far- 
reaching effect on Duluth because 
several city blocks around the sta- 
tion are now "coming up." The 
urban renewal area includes com- 
pleted or planned hotels, apart- 
ments, plazas, an arena, a library, 
a broadcast center, and a marina. 

The physical details of the Duluth 
project were sketched in our first 
book. Here we deal with the organi- 
zational process. Because the suc- 
cess of the project depended upon 
a volunteer force that grew in size 
as the project gained momentum, 
we have outlined the main events so 
that anyone contemplating a simi- 
lar venture can see what was in- 
volved. This summary was made for 
EFL by Shirley Bergum, executive 
secretary of the St. Louis County 
Heritage and Arts Center. 


April, 1965 to March, 1966 

Determined needs, using 

■ Investigated what uses or organi- 
zations could be successfully com- 

■ Asked organizations for permis- 
sion to include them in the study. 

■ Determined how much space 
would be needed by each organiza- 

Restored Duluth Union Depot (left half) houses arts and cultural groups. Construction has started on 
the Performing Arts Building (right half). 


tion, and the specialized require- 
ments for each: light, offices, dis- 
play areas, seating for lecture rooms 
and auditoriums, projection areas, 

March to November, 1966 

Contracted for a feasibility study, 
paid for by the Junior League of 
Duluth and the Minnesota State 
Arts Council on a matching basis. 

October, 1966 

Organized a volunteer civic com- 
mittee to take over the completed 
study (the Interim Cultural Center 
Committee). It consisted of 16 peo- 
ple who represented the four organ- 
izations we were working with at 
that time (the St. Louis County His- 
torical Society, the A.M. Chisholm 
Museum, the Duluth Art Institute, 
and the Duluth Playhouse), the Jun- 
ior League, plus six "at large" civic 
leaders. Later, this committee grew 
to 35, mostly from requests to serve 
on it. 

May, 1967 to February, 1968 

Site Committee established to de- 
termine which of two stations (Soo 
Line Depot and Union Depot) would 
be best for the purpose. Selected 
Union Depot and succeeded in 
getting it on the National Historic 

Continuing Preliminaries 

■ Negotiated option on property. 

■ Attorney and real estate broker 
joined committee. 

■ All costs carried by individuals 
on the board. 

■ Incorporated (as Area Cultural 
Center Corporation) to allow Center 
organization to accept the option. 

■ Volunteer attorney helped with 
the articles of incorporation. 

■ Corporate board started with nine 
members and grew to the present 

■ Requested and received letters 
of intent from the involved organi- 

■ Contracted with local architect to 
do preliminary mechanical and en- 
gineering study on the building. 
Funds for the study were raised In 
small amounts ($10) so no one con- 
tacted would later feel he had al- 
ready "given" to the Center. No 
commitment for further work on the 
project was given to the architect 
at this time. 

■ Asked County of St. Louis to ac- 
cept ownership. County rather than 
city was selected for wider scope 
and area concept. 

Evaluation of Project 

■ Questionnaires sent to area or- 

■ Two board members traveled to 
four similar centers in cities of com- 
parable size (Waterloo, Iowa; Peo- 
ria, III.; Rochester, Minn.; and Bing- 
hamton, N.Y.) and then to St. Paul, 
Minn., interviewing directors, edu- 
cators, and "just people." 

■ Questionnaires mailed to other 

Final Planning Stage 

■ Signed option - $137,500 for 
130,400 sq ft of land, including 
48,000 sq ft in depot. 

■ Formed building committee with 
a volunteer chairman who had an 
architectural, engineering, and city 
planning background. Each par- 
ticipating organization was repre- 
sented on committee. 

■ Set up temporary office and hired 
Shirley Bergum as project coordi- 

■ Drafted bylaws and policy. The 
work was done by a volunteer at- 

Museum of Transportation and Industry in train shed behind arts center. 


torney, a representative of each or- 
ganization, and the two board mem- 
bers who had toured other centers. 

■ Contracted with a consultant, 
Marlow Burt, director of the St. Paul 

■ Held public meeting and tours at 
the depot. 


■ Finalized bylaws. 

■ Requested and received letters 
from each organization formally 
asking to be a participating member 
of the Cultural Center. 

■ Advertised for an architect. 

■ Started fund raising. 

■ A volunteer finance committee 
was established, including a spe- 
cialist in foundation grants (the as- 
sociate provost of University of 
Minnesota, Duluth), a specialist in 
federal grants (the manager of a 
local TV and radio station who had 
helped with the Industrial Park and 
airport projects), businessmen who 
had corporate contacts, and civic 

■ The Executive Committee started 
work on an operating budget. With 
the assistance of an Operating 
Committee (all local people involved 
in property management, chaired 
by the manager of Duluth's Arena- 
Auditorium complex) they explored 
aid available for building mainte- 

May, 1973 

■ Set up an office at the depot and 
hired full-time director and secre- 

March, 1974 

■ Changed name to St. Louis Coun- 
ty Heritage and Arts Center to re- 
flect the county ownership of the 

■ Drew up management agreement 
with the county to assure that the 

Center Board would indeed manage 
the Center's affairs. 


Finalized building plans, which were 
divided into three stages: 

■ Railroad and Transportation Mu- 
seum (given priority because a 
$350,000 grant was received from 
the National Economic Develop- 
ment Authority which had to cover 
80% of that phase). 

■ Depot renovation. 

■ Construction of a performing arts 
building, plus a link between that 
and the depot, and completion of 
art rooms in the depot under the 

■ Continued fund raising for depot 

■ Historic Preservation grant from 
HUD - $201,250. 

■ Two grants from Upper Great 
Lakes Regional Commission — 
$100,000 each, supplementary to 
HUD grant. 

■ Foundation, corporate, and indi- 
vidual contacts and applications 

March to December, 1973 

Railroad and Transportation Mu- 
seum construction. 

■ Volunteer committee of 200, 
which had been set up for railroad 
museum work, worked on a model 
train display depicting railroading 
in Minnesota. They also leveled 
tracks and worked on renovation 
and repair of antique railroad equip- 
ment donated to the museum. 

June, 1974 

■ Museum opened to public. 

November, 1973 
Depot renovation. 

■ Center advertised for bids. 

■ On four Saturdays, members of 
the involved organizations' Boards 
of Directors, spouses, and college 
students turned out with wrecking 
bars and hammers to tear down par- 
titions and the false ceiling. The 
National Guard supplied trucks and 
drivers to haul away debris. 

January, 1975 

■ Renovation completed. 

January, 1974 

Performing Arts Building and Link 

■ An architect was commissioned 
to complete plans and specifica- 

July, 1975 

■ Called for construction bids. 


Yuma, Arizona 

Southern Pacific Railroad Depot 

The Yuma Fine Arts Association (YFAA) 
converted the Yuma Southern Pacific Railroad 
Depot into a visual and performing (out of 
doors) arts center. The building was donated to 
the YFAA, and the renovation was done with 
$110,000 in pledges, a couple of grants, and 
uncounted hours of free services from 
architects, engineers, contractors, and citizens 
who pitched in with their hands. 



With so many bright ideas buzzing 
around for things to do with old 
railroad stations, it is easy to forget 
that they might still usefully ac- 
commodate passengers making 
train journeys. Such an oversight 
seemed to happen in the nation's 
capital where Union Station was 
still serving Amtrak's trains. 

But the Department of the Interior 
developed plans to convert it to a 
visitors' center for the bicentennial 
celebration, and to build a com- 
bined rail, subway, and bus station 
next door. Apparently the sched- 
uling was poor, and the old rail fa- 
cilities were closed long before new 
ones could be built. Amtrak sued 
the railroads that own the station; 
the banks financing the project held 
back their money; and the construc- 
tion work stopped. Congress at- 
tempted to inject more funds, but 
legal hassles kept the job closed for 
several months. Work resumed in 
December, 1974, and the target for 
completion is July, 1976. 

The whole affair stems, say some 
critics, from attempts to recycle a 
building that really didn't need it. 
The train schedules were increas- 
ing enough for the building to con- 
tinue its original role, so it only 
needed cleaning up and a few more 
tenants. Unfortunately, so much 
demolition had been done inside the 
great hall before work stopped that 
now It is not economically sensible 
to return the building to its original 

However, various groups and agen- 
cies seem to have learned some 
lessons from Washington, D.C.'s 
plans that went awry. Countless cit- 
ies are combining (or planning to 
combine) continuing passenger rail 
service with recycling of only those 
sections of the stations that are 
truly underused. 

Partly responsible for this progress 
is a change in federal edicts that 
now permit funds assigned to inter- 
state highways in urban areas to be 
applied to other kinds of transporta- 
tion, including rail projects. The 
largest reallocation of this sort oc- 
curred in Massachusetts where $670 
million was shifted from freeway 
construction to improving Boston's 
rail system. 

The federal Amtrak Improvement 
Act of 1974 gave the art of conserv- 
ing railroad stations a good boost. 
One section enables the Secretary 
of Transportation to provide finan- 
cial and technical assistance to 
a demonstration program of inter- 
modal terminals. Under this pro- 
gram at least three large railroad 
stations will be converted into inter- 
modal transportation centers. The 
Rail Passenger Services Act defines 
intermodal transportation as includ- 
ing motorbus, mass transit (rail or 
rubber tire), airline ticket offices 
and passenger terminal providing 
transportation to airports. 

In addition, the federal government 
can use funds and technical aid for 
keeping alive terminals which seem 
to have a good chance of being con- 
verted to another use later. Assist- 
ance can also be given to state and 
local governments or other groups 
to stimulate the development of 
plans for converting terminals to in- 
termodal centers and places for 
civic or cultural activities. This aid to 
railroad stations is administered by 
the Federal Railroad Administration 
(FRA). Criteria for receiving financial 
assistance include the requirement 
that the terminal be on the National 
Register of Historic Places and that 
its architectural integrity must not 
be compromised by the proposed 
conversion. To help the Department 
of Transportation decide which ter- 

minals are good candidates, the 
Secretary can call on the Advisory 
Council on Historic Preservation or 
the National Endowment for the 
Arts. Both are federal agencies. 

A limit is set on the federal share of 
a terminal conversion: not more 
than 60% of the total cost of con- 
version can be paid under the pro- 
visions of the Amtrak Improvement 
Act. In October, 1974, Congress au- 
thorized a $534.3 million appropria- 
tion for assistance under the act. 

John T. Hirten, deputy administrator 
of the Urban Mass Transportation 
Administration (UMTA), says that 
his administration disbursed $875 
million in fiscal 1974for urban trans- 
portation capital improvement pro- 
grams. (These funds have nothing to 
do with the Amtrak appropriations.) 
This included a commitment of $1.5 
million to acquire and redevelop the 
Santa Fe terminal in San Diego as 
an intermodal transportation center, 
and about $5 million to the Union 
Station in Washington, D.C. 

Hirten believes the intermodal con- 
cept will be the salvation of many 
railroad stations since it is easier to 
incorporate road transportation in- 
to a railroad station than to move 
the tracks to another location. He 
says, "The type of help that UMTA 
can offer would enable the develop- 
ers of a city station to include in the 
project a bus interchange or a light 
rail connection to an airport. 

"San Diego is a good example for 
the sort of situation where UMTA 
can provide help. The depot was 
completed in 1915 in the Spanish 
colonial revival style. Once a busy 
rail center, it now serves only three 
daily trains to Los Angeles. Obvi- 
ously there appeared to be many 
good reasons to discard the build- 


ing and the train service, and many 
people tried. 

"Fortunately, city planners and pri- 
vate developers concluded that the 
station could be a major resource 
in the future revitalization of the 
city's transportation services. Even 
the Los Angeles to San Diego trains 
can be made more attractive be- 
cause travel time can be substan- 
tially reduced by improvements to 
the roadbed and new equipment. 

"Proposals for the station center 
around use as a bus terminal — for 
city transit minibuses, which will 
circulate throughout the downtown 
area, and for Greyhound, Trailways 
and Mexicoach - plus Amtrak facili- 
ties. The city hopes that the airlines 
will also establish ticketing and bag- 
gage facilities at the terminal in con- 
junction with express bus service to 
the airport. 

"When renovations are complete, 
the terminal will help to relieve con- 
gestion in the downtown area and 
reduce travelers' confusion since it 
will be a central meeting place for 
bus, rail, and air travel. Estimated 
cost of the project is $5.5 million, 
including site acquisition and re- 
furbishment of the structure. Funds 
are expected to come from several 
sources, including the city and 
some private developers, who will 
establish a restaurant and other 
commercial facilities at the site. 
UMTA is contributing, and Amtrak 
has agreed to pay a fair market ren- 
tal for ticketing and passenger-wait- 
ing space." 

San Diego 


Seattle, Wash. 

Union Station 

Seattle's Union Station is a sturdy, 
unspectacular building standing 
ennpty on the edge of the central 
business district. But if the city's 
plans are realized it will be revived 
as both a train station and a com- 
muter bus terminal. By combining 
rail and bus and an unspecified 
rapid transit system, the station will 
qualify for federal funds for in- 
termodal transportation; indeed, it 
could be one of the three demon- 
stration projects for the UMTA 

At the end of 1974, the agency ad- 
ministering the station project, the 
Port of Seattle, retained an archi- 
tectural firm to develop a plan for 
the terminal. Significantly, the first 
task for the firm was to work on the 
necessary grant applications (about 
$50,000 of the fee is assigned to this 
first step). 

Although Union Station is now emp- 
ty, train service is provided by Am- 
trak to an adjacent station. King 
Street that is owned by a different 
railroad company. Tracks from King 
Street station pass underneath the 
city, but Union Station has no un- 
derground tracks. The intention of 
the planners is to maintain service 
on the underground tracks but 
create passenger access from the 
Union Station terminal to the King 
Street tracks. The existing above- 
ground Union Station tracks will be 
removed to make space for a sur- 
face transportation center. 

Seattle has a unique city bus service 
for a major city — all rides within the 
central section are free. Since Union 
Station is just inside this zone, when 
its bus facility is completed com- 
muters will be able to ride on to 
work free. The station is also only a 

five-minute walk from an enclosed 
football stadium now under con- 
struction. So the combination of lo- 
cal transit service with the rail 
service the station can offer makes 
particularly good sense for this city. 

Location, as anyone who has tried 
to sell a house knows, is one major 
criterion for making real property 
valuable. Union Station is much bet- 
ter placed than most other big city 
terminals. It not only lies between 
the downtown district and the new 
stadium, it is also adjacent to 
the International District (formerly 
Chinatown) and the revitalized Pio- 
neer Square neighborhood, which 
is creating a sophisticated shop- 
ping, eating and sauntering area 
amidst cheap hotels and bars in a 
section of town unvisited by the 
middle class in decades. If Union 
Station is refurbished as a transpor- 
tation center, it will complement the 
work done in Pioneer Square and 
demonstrate that old buildings can 
be conserved by putting them to 
work for the benefit of the public 
through public agencies. 

The Port of Seattle didn't start the 
movement to reuse the Union Sta- 
tion but joined in after another gov- 
ernment agency had initiated a 
feasibility study on converting the 
terminal into an administrative 
headquarters and a museum. The 
offices would have been for the 
Municipality of Metropolitan Seattle 
(Metro) which has authority over the 
area's commuter bus services. It is 
Metro's business to have a well in- 
tegrated transportation system, but 
its charter does not permit the agen- 
cy to own a facility and lease space 
to commercial carriers. The Port, 
however, is empowered to build, 
own and operate transportation ter- 
minals (it owns the Seattle-Tacoma 
Airport) and thus would be the ap- 


propriate authority to buy Union 

Early in 1975, the cost of the real 
property had not been settled be- 
tween the Union Pacific Company 
and the Port of Seattle. When it is 
negotiated, the Port expects to fi- 
nance purchase of the terminal with 
a revenue bond that will be repaid 
with rental income from Amtrak, bus 
carriers, and other tenants. In addi- 
tion, it expects to obtain funds from 
the U. S. Department of Transport. 

Bus companies have stated they 
have no plans at present that would 
preclude them from taking space in 
Union Station, but it is too early for 
them to agree to leases since the 
costs are not known and cannot be 
until the purchase price is set. 

One of the development plans for Seattle includes new government offices, B, next to Union Station, A, and a parking 
garage, 0. Trains wfould use tracks into King Street Station, D. 

Union Station 

King Street Station 



Cincinnati, Ohio 

Union Terminal 

In our first railroad station book, we 
listed Cincinnati Union Terminal as 
an endangered species. But as of 
the beginning of 1975, this huge 
masterpiece seems to have a good 
chance of being taken off. Plans for 
transforming it into an intermodal 
transportation center have been 
made, and UMTA is weighing a Cap- 
ital Assistance Grant application for 
$11 .7 million. If the grant is approved 
the city will contribute $2.9 million 
of its own funds. 

Under the plan, this $14.6 million 
capitalization will be used to buy the 
station and land (for the bargain 
price of $1 million), refurbish the 
terminal's extensive basement, re- 
model its office spaces, and build a 
new bus maintenance facility on an 
adjacent site. The buses belong to 
the Southwest Ohio Regional Tran- 
sit Authority (SORTA), a public 
agency that runs commuter bus 
services. SORTA will lease the sta- 
tion from the city, house its 400 staff 
members in the existing and new 
buildings, and rent space to com- 
mercial carriers, such as Amtrak, 
Greyhound and Trailways. 

UMTA's mandate does not include 
long distance travel, so it can award 
funds only for those parts of a sta- 
tion that are to be used for local 
transit services. Since intermodal 
centers usually house both local 
and long distance services under 
the same roof, it often becomes dif- 
ficult to determine UMTA's share of 
a project. However, this assessment 
does not appear to be a stumbling 
block in Cincinnati, according to an 
UMTA spokesman. At the time of 
writing, the problem faced by UMTA 
Is to ascertain whether the proposed 
conversion will meet the require- 
ments of other federal agencies. 

This is because the station is on the 
Historic Register, and the Advisory 
Council on Historic Preservation in 
cooperation with UMTA prescribes 
the limits of structural alterations, 
and these limits may not be gener- 
ous enough for other agencies' pur- 

In addition to the hoped-for UMTA 
funds, the city has allocated to the 
station project $700,000 of the 
money it has received from the Fed- 
eral Highways Administration's Ur- 
ban Systems Fund. To meet FHA re- 
quirements, the city has also had to 
contribute $300,000 of its own. 

Dallas, Texas 

Union Terminal 

A proposed redevelopment project 
in Dallas will encompass the Union 
Terminal, which the city bought in 
1973. Plans call for the city to trans- 
form the terminal into the Dallas 
Transportation Center. The private 
corporation developing the over-all 
site says, "Current rail and bus ser- 
vice will ultimately be supplemented 
by additional modes of transporta- 
tion such as subways, high-speed 
rail lines to the airport, commuter 
lines, and air-cushion vehicles." A 
truly multimodal transportation 

The whole 50-acre development is 
called Reunion. Most of the develop- 
ment will be private; the city will pro- 
vide an activity center and a park, 
in addition to the transportation cen- 
ter. Construction has started on a 
hotel, and enthusiasm for several 
other major buildings runs high. 

An important aspect of the Dallas 
Reunion development is the manner 
in which the land was assembled. 
The city and the developer each 
owned a substantial part of the total 
area, but the boundary lines zigged 
and zagged so that neither party 
could build in its own best interest. 
By mingling the properties and then 
dividing them, each party obtained 
land that it wanted, if the develop- 
ment does not go through, the terms 
of the transfer allow the former 
boundary lines to be restored. 


Los Angeles, Calif. 

Union Passenger Terminal 

In our previous book we placed the 
Los Angeles Union Passenger Ter- 
minal on the endangered species 
roll and noted, "There does not 
seem to be any great awareness 
about the station's future." Appar- 
ently we were wrong. 

Even before we wrote that, the three 
railroad companies who owned the 
station had retained a firm of archi- 
tects and planners, Daniel Mann 
Johnson and Mendenhall (DMJM), 
to tell them what might be done with 
their underused station. 

The result is a plan for commercial 
reuse of the terminal, leavened with 
civic cultural events. Amtrak will 
continue to use part of the station to 
accommodate about 3,000 people 
daily (seven arrivals and seven de- 

The railroads are retaining owner- 
ship of the station, leasing it to Union 
Station Company, a joint venture by 
two large development companies, 
one of which is partly owned by 

The following account of the project 
- from the first study to current sta- 
tus - was provided by Robert Kite, a 
DMJM associate. 

"The study recommended four con- 
current provisions for the station. 
First, to restore and maintain the 
famed architecture, which is a clas- 
sic example of early California Span- 
ish style. Second, to provide and 
keep the nostalgia of the 1940s for 
the millions who remember the sta- 
tion as a landmark in Los Angeles. 
Third, to maintain the building as a 
railroad museum and exhibit area. 
The fourth recommendation was to 
provide a high quality shopping and 
dining center, similar to Ghiradelli 

Square, the converted chocolate 
factory on San Francisco's water- 

"All proposals would keep the rail- 
road station working, but the pres- 
ent 15 tracks will be decreased to 
four. Amtrak's waiting room would 
be in a prominent location until it 
could build a new station. 

"The developers in the joint venture 
negotiated a 55-year lease for 11 of 
the terminal's 40 acres, at a mini- 
mum of $200,000 a year. About 200,- 
000 sq ft of the building will be reno- 
vated, added on to, or in some way 
slightly changed to accommodate 
the restaurants and retail stores. 
About 75% of the building will be 
tenant space. A 700-car parking lot 
will be provided within the 11 acres, 
most of which will be landscaped 
exhibit areas, including two magnifi- 
cent original patios that nobody 
would dare change. 

"The station is one of the most sen- 
sitive issues in Los Angeles, a build- 
ing difficult to tamper with, and this 
causes a lot of problems. It has been 
declared a National Historic Land- 
mark and a California historical 
monument, so there are many 
changes we can't make. And we 
have so many people and interests 
to satisfy: the planning department, 
the fire department, the various his- 
torical societies, the owners, Am- 
trak, and, of course, the investors. 
The building department says it 
must be brought up to 1974 code, 
and that is not easy. Although the 
building is structurally sound, noth- 
ing else was. For instance, we would 
have to redo the whole of the elec- 
trical system. 

"Then there are private interest 
groups. For example, the station is 
in old Chinatown, so some groups 
want to have a Chinese restaurant 

or a Chinese exhibit. A Mexican- 
American community is directly 
across the street, on Olivera Street, 
which is also a very famous place 
that gets three million visitors a year 
because Los Angeles was founded 
there. Those people also have their 
particular needs and recommenda- 
tions for the project. 

"Probably the most important eco- 
nomic aspect of this whole project 
is its good location. It's in the heart 
of downtown Los Angeles, adjacent 
to the historic El Pueblo de Los An- 
geles, Little Tokyo, the civic center, 
the convention center, and the fi- 
nancial center. The station itself can 
be a giant tourist attraction and is 
expected to pull in about three mil- 
lion people the first year, probably 
twice that number eventually. Am- 
trak hopes to double its number of 
passengers because of the expo- 
sure the reused station will get, and 
vice versa." 


y ©oe© 


St. Louis, Mo. 

Union Station 

Last year efl wrote, "Recent plans 
for the St. Louis Union Station sug- 
gest tiie possibility of mixed-use 
development with private funds. But 
the vigor of the downtown commu- 
nity is low, and considerable promo- 
tion will be necessary to make this 
solution practical." 

Not much has changed. A Florida 
promoter bought the station in July, 
1974, in the name of Union Center 
Venture, commissioned a feasibility 
study, and published a report. This 
report tells about the corporation's 
aspirations to create luxury housing, 
hotels, retail spaces, offices, and 
recreation facilities on the site. The 
plan is carefully described as a con- 
cept, not a master plan, and its pur- 
pose is to persuade investors of the 
viability of the St. Louis downtown 

But optimism about investments in 
inner cities has declined nationally, 
and there doesn't seem to be much 
hope for rebuilding the area around 
Union Station. However, Amtrak will 
continue to use part of the station 
for its service, and the terminal is 
designated as a National Historic 
Landmark and a St. Louis landmark 
so the building will probably at least 
escape demolition. 

Orlando, Fia. 

The Orlando RR Depot 

The Orlando, Fla., station is present- 
ly slated for interesting commercial 
redevelopment. If all had gone well, 
it would also have continued to 
serve the public as a passenger ter- 
minal. Plans had called for the intro- 
duction of turbo train service be- 
tween Orlando and Miami, 269 miles 

Unfortunately the estimated deficit 
of $900,000 a year for the turbo 
trains was more than Amtrak and 
the state department of transporta- 
tion could swallow, so the project 
was shelved. (Conventional trains 
would probably not have sufficient 
appeal to attract passengers, and 
they are not under serious consider- 

But all is not lost. The 1885 station 
is protected by the city's historic site 
designation. It has been leased with 
an option to purchase by a private 
developer who has also leased two 
adjacent blocks, where he proposes 
to make an entertainment, shopping, 
and restaurant complex to attract 


New London, Conn. 

Union Station 

In its heyday Union Station, in New 
London, Conn., was an important 
transportation connection between 
rail and boat ferries that docked 
alongside, but it now suffers fronn 
the general decline in passenger 
service. It isn't an architectural gem, 
but it was designed by the eminent 
Victorian architect, Henry Hobson 

This pedigree spurred national pro- 
test when the city condemned the 
station in order to make way for an 
urban renewal program. Fortunately 
demolition was postponed because 
of this public arousal and because 
of persuasion from the U. S. Depart- 
ment of Housing and Urban Devel- 
opment, which saw the possibilities 
of reusing the station for commer- 
cial purposes combined with pas- 
senger train services. 

The first major action to reuse the 
building came in late 1972 when 
some New Londoners privately in- 
vited Anderson Notter Associates, a 
Boston architectural firm, to explore 
adaptive uses of the building, make 
cost estimates, and find out what 
public funds might be available. 

The consultants encouraged a dozen 
professional people in New London 
to establish a nonprofit organization 
— The Union Station Trust, Inc. The 
results of the feasibility study indi- 
cated that there was a good poten- 
tial market for a restaurant in the 
building; it also suggested retaining 
the rail service. Since the Trust did 
not want to develop the station itself, 
the members persuaded their archi- 
tects to take on the role. The firm, 
with some other partners, created 
Union Station Associates of New 
London, which was accepted as the 
developer by the city's redevelop- 

ment agency. The agency agreed to 
postpone demolition until the devel- 
oper could raise the necessary 
funds to rebuild the station accord- 
ing to the plans it had filed. 

When Union Station Associates 
completes a mortgage it is now ne- 
gotiating, it will take title to the 
building for a purchase price of 
$11,400. It's an insignificant sum for 
a building of that size and actually 
represents tlie value of the con- 
demned land beneath it. But big 
money will be needed for the re- 
rnodeling, which is estimated at 
$750,000. This estimate is not ex- 
pected to escalate, says the devel- 
oper, because the construction work 
will be done by a contractor who is 
on the team. (This contractor previ- 
ously worked with the architect on 
the highly successful remodeling of 
Boston's former city hall into a res- 
taurant and commercial space.) 

The New London plans call for re- 
modeling the station's waiting room 
into a restaurant; talks are now in 
progress with a prospective leasee. 
Another income source will be 
Amtrak, which will take a 20-year 
lease for passenger facilities in the 

There will also be space for exhibits 
related to transportation; this will 
be operated by the nonprofit Union 
Station Trust, Inc. 

The trust has already been active in 
fundraising for the station project. It 
obtained small grants from the Na- 
tional Trust for Historic Preservation 
for a marketing study, and a low- 
interest loan from the same source 
for start-up financing; it has also ap- 
plied to private foundations for 
grants. The Department of the Inte- 
rior's Historic Preservation program 
gave $6,100 through the Connecticut 
Historic Commission to assist in the 

purchase of the building. The larg- 
est award of funds so far was made 
by the New London Urban Renewal 
Agency directly to the developer — 
$90,000 for exterior restoration. 



First floor mezzanine 







At first blush, there is no apparent 
similarity between a commercial 
real estate developer and a histor- 
ical society. But any nonprofit or- 
ganization that acquires, converts, 
and operates a former railroad sta- 
tion (or any other old, worthwhile 
building) has to assume most func- 
tions of the professional developer. 
It's an unfamiliar, perhaps alien, role 
to many people, but they have to 
master the rudiments of a complex 
business — and do so quickly — if a 
project is to succeed. 

The next four chapters cover the 
business side of conversions — how 
to evaluate a project's economic 
feasibility, how to reduce the cost of 
both acquiring a property and oper- 
ating it after conversion, how to de- 
termine the real cost of financing 
the project, and how to determine 
the marketability of the proposed 

Most of the material for these topics 
was supplied by Gary Stonebraker, 
Vice President of the AIA Research 
Corporation, Washington, D.C. 

Determining Feasibility 

Both nonprofit and private real es- 
tate developers attempt to make 
buildings self-supporting. (Private 
developers also seek to go over and 
above the self-supporting level, for 
profit, if possible.) To be self-sup- 
porting, a building must generate 
revenues from rentals, sales, etc., 
that balance the costs of construc- 
tion, interest, utilities, maintenance, 
cleaning, taxes, insurance, etc. In 
other words, money coming in must 
at least equal money going out. 

However, there is another more cru- 
cial aspect to self-support that is 
related to long-term financing. Lit- 
erally no one pays cash for con- 
struction any more. All buildings, 
public or private, rely on long-term 

financing — borrowing — to pay for 
initial site acquisition and construc- 
tion costs, as well as other "front- 
end" costs, such as architects fees. 
In order to borrow enough to pay for 
these costs, the project's income 
and expenditure profile must be suf- 
ficiently strong to assure the lender 
that he will be paid back. (He always 
assumes that he will be paid only 
by the proceeds from that project.) 

So the developer, in order to con- 
vince prospective lenders and/or 
investment partners that a project is 
worthwhile, must assemble a "pack- 
age" consisting of: proof of a site 
or property that is properly zoned 
and for which terms of purchase 
have been secured; a schematic de- 
sign for construction or improve- 
ments to the property; cost esti- 
mates for construction work; an as- 
sessment of the potential market for 
the end-product, including rental or 
sale prices and other income to the 
project; a series of economic pro- 
jections and analyses of the project. 

After the package is assembled, the 
developer shows it to a lending in- 
stitution and/or to prospective par- 
ties who may become partners by 
making equity (cash) investments 
in the project. The lenders and in- 
vestors will scrutinize the package 
and the developer's record thor- 
oughly before making decisions. 
The mechanics of decision-making 
on the part of developers, lenders, 
and investors are worth examining 
so that they can be used by new- 
comers to the business. (Note that 
the terminology used throughout 
this explanation is that of bankers 
and investors. All technical terms 
are defined but in some cases their 
usage differs from meanings given 
them by the general public and even 
slightly from the sense used by 

The process can best be under- 
stood by examining a hypothetical 
project involving the acquisition, 
restoration, and leasing of an exist- 
ing building. Assume a building of 
about 20,000 sq ft, plus site, located 
in an area of moderate commercial 
value. The acquisition cost for the 
building is $406,000, including fees. 
The cost of restoring the building 
brings the total estimated project 
cost to $1 million. (See table A.) 

The first thing a developer does is 
to make an economic feasibility 
study. A more-or-less standard pro- 
cedure has been developed by lend- 
ing institutions to determine how 
much they can lend on a project. 
The developer conducting an eco- 
nomic feasibility study uses the 
same method to estimate how much 
he can borrow. This amount, com- 
bined with his (or his partners') 
equity, determines the money avail- 
able for the project. 

As we shall see, projected returns 
from the project and risk factors are 
figured into the mortgage avail- 
ability equation. Therefore, if a pro- 
posed project can be completed 
for the amount that can be raised 
through mortgage and equity invest- 
ment, it can be assumed to be feasi- 
ble. The steps used to analyze feasi- 
bility are explained below and 
shown in table B and following 

If possible, the developer will try to 
finance a project entirely on his 
own, with a combination of a mort- 
gage and his own capital. Only if 
this is insufficient to pay costs will 
he consider taking in limited part- 
ners to raise more capital and in- 
crease the equity. 

Therefore, the first critical question 
is: how much can the developer 
borrow on mortgage? This is de- 

Table A — Project Cost for Hypothetical Restoration and Conversion of a Small Building 

1 Acquisition of property 

2 Closing costs and fees 

3 Subtotal: acquisition 

4 Remodeling (20,000 sq ft @$20 per sq ft) 

5 Site development 

6 Subtotal: construction 

7 Architect's fees (@ 7% of line 6) 

8 Attorney's and other fees (@ 1 % of line 6) 

9 Subtotal: fees 

10 Subtotal: acquisition, construction, fees 

11 Interim financing, acquisition 

12 Interim financing, construction 

13 Subtotal: interim financing 

14 Subtotal: project cost 

15 Contingency (approximately 4% of line 14) 

16 Total: estimated cost 





$ 31,500 

$ 36,000 

$ 40,600 


$ 64,900 




$ 956,900 



Table B — Project Feasibility Analysis 

Base data 

Annual figures Results 

1 Rentable area 

2 Average annual rental 

3 Annual income at 100% occupancy 
(line 1 X line 2) 

4 Vacancy loss 

5 Gross income 

6 Utilities 

Taxes and miscellaneous 
Insurance and other 

7 Operating expenses 

8 Income after operating expenses 

18,000 sq ft 











9 Market value at .10 cap rate 
(line 8 divided by cap rate) 
10 Maximum mortgage 
(75% of line 9) 


11 Annual mortgage payment 
(on principal shown in line 10) 

12 Cash throw-off 

13 Max. equity for 10% annual return 

14 Max. allowable project cost 
(line 10 plus line 13) 

$ 29,400 

$ 294,000 



termined by the project's "market 
valuation," which is basically an es- 
timate of the mortgageability of the 
project based on its ability to repay 
a loan. 

To determine market valuation, 
mortgage lenders estimate the 
gross income that will be derived 
from rentals in the completed proj- 
ect (see table B, lines 1-3), including 
estimates for losses from vacancies 
during tenant turnover, etc., (line 
5). Then estimates of operating ex- 
penses, such as taxes, insurance, 
maintenance, and utilities are de- 
ducted from the gross income (line 
7). The remaining amount — the "net 
income after expenses" — should be 
available annually to retire the debt 
(line 8). 

However, the prospective mortgage 
lender must also consider the worst: 
what if the project fails, and he must 
foreclose? Of couse, he will lose all 
the interest income, but he must at 
least be able to recover the princi- 
pal of his loan. So his key question 
now becomes: if I have to take over 
this property, how long will it be be- 
fore I can recoup my investment? 
After all, the lender's business is to 
use his money to make money; in 
the case of a foreclosure (with its 
forfeit of interest) he wants to know 
how soon he can have his original 
money available again for reinvest- 
ment in a more profitable enterprise. 

The answer to the lender's question 
can be figured easily from the pro- 
jected net income. Suppose that the 
lender advances $1 million and that 
the net income after expenses is 
$200,000 per year, it will take five 
years to recover the investment. Ex- 
pressing the same figure slightly 
differently, the investment capital 
can be recovered at a rate of 20% 
per year. This is known as the "rate 
of capitalization," or the "cap rate." 

The cap rate is very important be- 
cause it is a key figure in the for- 
mula lenders use to determine "mar- 
ket value" of a project. For each 
kind of investment project, there is 
usually a cap rate figure that most 
lenders use to determine market 
valuation. This rate will fluctuate 
with money markets and competi- 
tive pressures among lenders, so 
there is no set way to determine 
what the prevailing cap rate on a 
project will be. 

Whatever it is, it is used to deter- 
mine market value of the project by 
simply dividing the net income (line 
8) by the cap rate. This resulting 
market value (line 9) is the maxi- 
mum mortgage risk that can be pos- 
sibly taken. For example, $113,000 
net income with a cap rate of 10% 
(i.e., divided by .10) equals market 
value of $1,130,000. 

But, over and above the test of mar- 
ket value, another factor is applied 
to determine how much the lender 
will, in fact, advance. This is called, 
the "loan value" and is commonly 
75% of market value. 

In a few projects, the loan value is 
so high that the mortgage alone can 
cover all costs. This is the develop- 
er's Nirvana; he has "mortgaged 
out" and can complete a project in 
which he has had to invest nothing. 
But few projects are so lucky, so we 
have set up our example with our 
hypothetical developer in the more 
common situation. At the prevailing 
cap rate of 10% his market value is 
only $1,113,000, so he can obtain 
only a $847,500 mortgage, which is 
$153,000 less than he needs for his 
project. To go forward with his proj- 
ect, he will have to find that amount 

As mentioned before, the commer- 
cial developer will try to provide 
those needed funds (which are 

called "equity") himself; if he can't, 
he'll seek limited partners to help 
him. But no matter who puts it up, 
equity money must be regarded as 
an investment. If the same money 
can bring a higher return elsewhere, 
it doesn't make sense to put it into 
the project. 

Everyone who makes an investment 
must receive a reasonable return 
or it's not a reasonable Investment. 
However, for a nonprofit organiza- 
tion the return does not have to be 
cash. It could be more space, free 
rent, or avoidance of other costs 
which would be incurred if they did 
not have the building. It could even 
be better accomplishment of their 
mission (which might include in- 
creased public recognition) for no 
increase in their annual budget. 

If a developer - profit-making or 
nonprofit - does not have sufficient 
investment capital and must take in 
profit-making limited partners, they 
will, of course, insist on a money re- 
turn on their investment. 

However, a nonprofit developer has 
an alternative to taking in for-profit 
partners. He can search out inves- 
tors who will not demand a cash re- 
turn. (This search is another name 
for fund raising.) Such investors 
may be government agencies or 
foundations, whose return will be 
the public good (or some perceived 
part of it); private firms or organiza- 
tions seeking a return in public re- 
lations; private persons looking for 
anything from their name on a build- 
ing to the feeling of contributing to 
a good cause. 

Such investors may even be found 
by a for-profit developer if portions 
of his project may be interpreted as 
contributing to the public good. 

Returning to the explanation of how 
a for-profit developer would analyze 



St. Louis 


a project, his next step would be a 
feasibility analysis to determine 
whether or not he can project a high 
enough return on equity investment. 

Let's assume that the minimum ac- 
ceptable return is 10% per year (a 
reasonable figure in today's money 
market). To find if a 10% return is 
possible, the analysis continues by 
listing the annual mortgage pay- 
ment on the $847,000 mortgage (line 
11). When this is subtracted from 
net income (line 8), the amount re- 
maining is the actual profit (though 
not what accountants call profit); it 
Is referred to as the "cash flow" or 
"cash throw-off" of the project (line 
12). This cash throw-off would yield 
exactly 10% on a $294,000 equity 

Assuming that our hypothetical de- 
veloper can locate this much equity 
capital, he now has $1,141,000 
($847,000 + $294,000) available to 
him, which is more than that re- 
quired by the project. Since he 
actually requires only $153,000 in 
equity, a much higher return of 19% 
can be paid; therefore, it should be 
relatively easy to obtain the finan- 
cing for such a project. 

A note of caution. One reason our 
hypothetical example works out so 
well is that it uses ideal assumptions 
about the project's rentability. First, 
we assumed that all 20,000 sq ft are 
rentable at a relatively high rent of 
$11.00 per sq ft. However, very few 
buildings are totally rentable: cer- 
tain space must go for corridors, 
mechanical facilities, toilets, etc. 
The "efficiency" of a building is 
measured in the ratio of rentable 
area to gross area. To show how 
this factor, as well as market rents, 
can affect project feasibility, com- 
parisons have been made in table C 
to illustrate marginal feasibility and 

In both cases, the project cost is 
assumed to remain the same at $1 
million. Because of lower rents, low- 
er design efficiency, and/or a prob- 
ably reasonable vacancy rate of 3%, 
the project income falls. Although 
operating expenses are thereby 
lowered, the net income falls, re- 
sulting in lower market value and a 
smaller loan value and mortgage. 
This increases equity requirements. 
In the "marginal case," the project 
can barely pay a 10% return on the 
required equity. In the last case, the 
return would be so small, that a po- 
tential for-profit investor would 
probably be better off shopping 
elsewhere. (To put it another way, 
if 10% is to be paid on equity invest- 
ments, the project can afford very 
little equity.) 

Table C — Alternatives to Table B — Project Feasibility Analyses 

Alternative A — feasibility 

Alternative B - marginal feasibility 

Alternative C - poor feasibility 

Base data 

Annual figures 


Base data 

Annual figures 


Base data 

Annual figures 



Rentable area 

18,000 sq ft 

18,000 sq ft 


16,000 sq ft* 


Average annual 





Annual income at 
100% occupancy 





Vacancy loss 








Gross income 





Taxes and 
Insurance and other 












Operating expenses 








Income after 
operating expenses 


$ 97,600 

$ 80,700 


Market value 
at .10 cap rate 





Max. mortgage 





Annual mortgage 





Cash throw-off 

$ 27,870 

$ 25,425 

$ 21,030 


Max. equity at 10% 
annual return 







Max. allowable 
project cost 




*AII assumptions as in table B except those indicated. 
Some operating expenses tend to vary naturally with rentable area and rental income. 


Costs in 

This process we have described of 
determining feasibility is more-or- 
less the same for all development 
projects — for-profit or nonprofit, 
large or small, building new or con- 
servation. But a couple of factors 
often appear to doom the economic 
feasibility of restoration and con- 
servation projects from the start of 

First, since most proposed conser- 
vation projectsare located in dense- 
ly built-up areas, they usually have 
high site acquisition costs. Second, 
there may be a lot of demolition re- 
quired before the building can be 
remodeled or repaired: that process 
is full of surprises since no one can 
know the true internal condition of 
a building until a few layers have 
been taken off. Therefore, construc- 
tion and remodeling cost estimating 
is very chancy indeed. 

Yet, although acquisition and con- 
struction costs for reused buildings 
are likely to be much higher than for 
new buildings, the restored building 
may not be competitive enough to 
be able to charge higher rents, or to 
sell at higher prices, or to com- 
mand more financing. Thus, pro- 
posed restoration projects are often 
economically infeasible. 

Can a group interested in conserv- 
ing a building do anything to over- 
come this hurdle? Frequently yes - 
with a little luck and an understand- 
ing that the mere existence of a 
good cause will not make the hard 
numbers disappear. What it has to 
do is seek ways to make substantial 
changes in the cost factors that af- 
fect project feasibility. Most often 
changes can be made to the broad 
classifications of: 

■ Site acquisition costs 

■ Renovation and construction 

■ Monthly operating costs 

■ Interest costs on capital 

Assuming the restored building will 
have a 27-year useful life span 
(roughly equal to the mortgage life), 
the breakdown of the total amount 
spent in our hypothetical example 
would be: 

■ Site 

acquisition $ 406,000 


Interest on 




2,01 1 ,500 48.9% 
1,178,900 26.7% 

$4,190,400 100.0% 
(For this calculation, cash throw-off, 
because it will be used as return on 
equity, is considered interest.) 

All of the above costs are interre- 
lated. Interest costs are directly pro- 
portional to capital costs. Changes 
in capital costs that reflect changes 
in materials or systems can also af- 
fect operating costs, and so forth. 
However, the chief lesson to be 
drawn from this breakdown is that 
factors other than design and con- 
struction contribute most signifi- 
cantly to project feasibility. 

The following sections explore each 
of the four areas mentioned to see 
how they might be changed and 
what the net impact on project feasi- 
bility would be. Figures used are for 
illustrative purposes only and will 
change from project to project. 

Reducing acquisition costs 

One of the major problems in con- 
servation projects is that historic 
buildings often occupy land whose 
commercial value far exceeds the 
income potential of the existing 
building (if indeed it has any). Re- 
development of the land at higher 
densities makes more sense in 
terms of strict economics. This fact 

usually brings pressure for the de- 
struction of the property. 

Because of these and other eco- 
nomic pressures the cost of acquisi- 
tion rises, prohibiting any possible 
reuse of the building, at least at first 

Looking at the example in the pre- 
vious chapter, we can see the im- 
pact of acquisition costs in the in- 
feasible projection. But if these 
costs could somehow be cut in half, 
the total project cost would come 
within limits of available financing. 

Publicland lease As we have noted, 
in many cases the most expensive 
part of a historical property is the 
land, not the building itself. In our 
example, between $250,000 and 
$300,000 of the cost might be land 

So the object of a potential conser- 
vation group must be to lower the 
cost of the land - or to avoid pay- 
ing for it at all. The latter is probably 
a more practical goal, since it may 
be possible to get someone else, 
such as a government body, to pur- 
chase the land in the public interest 
and then lease it to the conservation 

For example, most local govern- 
ments are empowered to create 
revenue authorities that can sell 
bonds to undertake a public-interest 
project, if it will produce sufficient 
income to retire the bonds. These 
bonds usually have much lower in- 
terest rates and much longer terms 
than commercial mortgages. If the 
local government is convinced of 
the worth and practicality of a con- 
servation and reuse project, it could 
use such bonds quite economically. 
The building could be resold to the 
developer, but the revenue authority 
would retain the land and rent it to 
the developer under a long-term 


Table D — Effect of Publicly-Financed Land Lease on Project Feasibility 

1 Adjusted cost: 
Project cost 
Less land 
Net cost 

Feasibility analysis: 

Income after operating expenses (from table C, alternative C, line 8) 

Land lease (estimated) 

Adjusted income after operating expenses 

Market value at .10 cap rate 

Mortgage value 

Annual mortgage payment 

Cash throw-off 

Max. equity at 10% return 

Max. allowable project cost 

$ 750,000 





lease. This would reduce front-end 
cash costs and provide lower cost 
long-term financing for the land. 
The effect on project feasibility is 
shown in table D. Improved cash 
throw-off could mean higher mort- 
gageability, while actual cash costs 

With such a lease arrangement, the 
project becomes marginally feas- 
ible. The exact effect would depend 
upon the term and interest rate of 
the revenue bonds, the mortgagor's 
attitude toward leases, etc. 

In a case where a project will re- 
quire parking facilities for the activi- 
ties to be housed in its building, the 
municipal parking authority might 
be used to acquire the land. Its reve- 
nue bonds could then be retired 
from parking fees, charged to users 
or paid by arrangement with the 
landlord or tenants. The net effect 
would be roughly the same as in the 

foregoing example. However, if fees 
were paid by users of the parking 
lot, there would be no annual land- 
lease cost for the developer, which 
would further improve project mort- 
gageability and feasibility. 

Tax relief to the seller One of the 

reasons that valuable commercial 
property commands high prices is 
that the seller includes in his price 
the taxes that he will have to pay on 
the transaction. Therefore, one way 
to reduce the price would be to pro- 
vide tax relief on the sale of proper- 
ties declared to have historical 
value. This would require a ruling 
from the Internal Revenue Service, 
and possibly new legislation. 

The basic object of such a change 
in taxation would be to end up with 
no tax on the resale of a building of 
agreed historical value if it is pur- 
chased by a group that promises to 
restore it. 

The mechanics might be as follows: 
the municipal government would 
declare the place to be of historical 
value, thus making it eligible for 
tax relief; then independent real 
estate appraisers would make a fair- 
market appraisal of the property. 
Next, the seller would compute the 
taxes he would normally pay upon 
sale of the property and deduct 
them from the fair-market value in 
setting his sale price. So long as 
the seller consummates the sale at 
or below this lower sale price, he 
would pay no income or capital 
gains taxes on the proceeds from 
the sale. 

This would be a form of indirect 
public subsidy for conservation 
projects since it would involve loss 
of tax revenue to the government(s) 
involved. Also, the extent of the re- 
lief would vary among projects, de- 
pending upon the tax status of the 





seller. The IRS could establish 
guidelines regulating such credits. 

Reducing renovation costs 

The construction costs of renova- 
tion are largely controlled by the 
architect's planning decisions, but 
the sponsors can make a couple of 
influential decisions before the 
actual design commences. 

Economical usage First is the care- 
ful consideration of the proposed 
uses since an existing building may 
be amenable to certain uses and 
hostile to others. Factors influenc- 
ing this include: the character of the 
structures (clear distance between 
walls or columns, etc.); extent and 
condition of mechanical services; 
building and fire code requirements 
regarding exits, toilets, etc., for the 
proposed occupancy; type of struc- 
ture, etc. Early in the game it is im- 
portant to have an architect or en- 
gineer look at the proposed usage 
for an existing structure and de- 
velop schematic plans. It is also im- 
portant to have a contractor involv- 
ed early so as to have access to 
good cost information. For this 
reason, developers ought to con- 
sider negotiated bidding or con- 
struction management approaches 
instead of the customary procedure 
in which contractors bid competi- 
tively for the work after all the plans 
and specifications have been com- 

Budget restraints The second de- 
cision is to clearly establish all bud- 
get items, especially those for con- 
struction and renovation, and then 
to stick to them. The project feasi- 
bility analyses show that cost over- 
runs can wreck project feasibility 
and may, in fact, bankrupt a project. 
The architect should be advised of 
the budget constraints at all times. 

Paradoxically, while it is important 
to control any cost item, it should 
be noted that these costs are only a 
part of the over-all cost of a project. 
In the example, a 10% change in 
construction costs may reflect less 
than a 2% change in actual monthly 
costs to the developer. This is be- 
cause about one-half of monthly 
costs are operating costs; about 
one-quarter is debt service on ac- 
quisition: and the remaining quarter 
is debt service on construction and 
other capital costs. 

Reducing operating costs 

As shown in our examples, about 
one-half of a project's costs are op- 
erating expenses. And except for 
taxes, the majority of these are for 
utilities and maintenance (princi- 
pally cleaning). Indeed, this area is 
where most projects are encounter- 
ing difficulty today. The cost of utili- 
ties and maintenance has risen 
faster than rents have, causing 
losses for many entrepreneurs. For 
this reason, operating costs must 
be projected very carefully from the 
outset of project planning. 

Several devices have been worked 
out to help commercial building 
owners keep pace with operating 
costs. Some have more effect on 
project feasibility than others. 

Cost-of-living clauses These are 
simple provisions included in a 
commercial lease allowing a build- 
ing owner to increase tenants' rents 
annually as operating costs rise 
above a stated level. 

Net leases To combat unpredict- 
able running costs, many spaces 
are rented on a net-lease basis un- 
der which the lessee pays for all 
taxes, utilities, cleaning services, in- 
surance, etc., apportioned to his 
space. On projects where there are 
common areas, the maintenance 

cost is prorated among tenants. But 
under net leases rents must be re- 
duced accordingly, so generally 
they do little to change over-all proj- 
ect economics. 

Shell space A common practice in 
commercial developments is to rent 
shell space. This is basically the 
same idea as net leases but goes 
even further; what the tenant gets is 
enclosed space with terminals for 
major utilities but with no interior 
improvements whatever. The tenant 
makes his own improvements, pays 
for separately metered utilities, and 
provides his own cleaning service. 
The landlord is responsible for the 
exterior and the common areas 
only. Use of this approach avoids 
the problems of satisfying different 
tenants' interior planning and con- 
struction requirements. It can also 
reduce capital requirements, but 
does not usually change project 

Tax abatement One of the largest 
operating costs for most commer- 
cial space is the annual property 
tax. The $26,000 illustrated in tables 
E and F was based on an assess- 
ment of $600,000 (60%) with a tax 
rate of $43.30. Many commercial 
properties pay much higher rates. 

Since high taxes are frequently the 
major culprit in making reuse proj- 
ects infeasible, some localities have 
introduced partial or full tax abate- 
ment (tax relief) to encourage rede- 
velopment. The effect of tax abate- 
ment is to increase income after 
expenses, which increases both 
mortgageability and cash throw-off. 
Table E computes the possible im- 
pact of 100% tax abatement on the 
infeasible project. 

Any taxing authority has the power 
to grant tax abatement for public 
benefit, but in some localities spe- 

Table E — Effect of Tax on Project Economics 

Base data 

Infeasible case With tax abatement 


Rentable area 

Average annual rental 

Annual income at 100% occupancy (line 1 x line 2) 

Vacancy loss 

Gross income 




Taxes and miscellaneous 

Insurance and other 

Operating expenses 

Income after operating expenses 

Market value at .10 cap rate (line 8 divided by cap rate) 

Maximum mortgage (75% of line 9) 

Annual mortgage payments (on mortgage for line 10) 

Cash throw-off 

Max. equity for 10% annual return 

Max. allowable project cost (line 10 plus line 13) 

16,000 sq ft 

$10/sq ft 


$ 160,000 

97% occupancy —4,800 

























cific legislation is required. As with 
the tax relief we recommended for 
the sale of historic buildings, new 
legislation in this area could specify 
tax abatement for the purpose of en- 
couraging historical preservation. 
There are numerous precedents, 
and many localities already have 
such provisions in their tax laws. 

Costs of financing 

One of the largest costs of any proj- 
ect is the cost of borrowing money 
to pay for the capital cost (i.e., mort- 
gage interest and return on equity). 
The cost of borrowing money is di- 
rectly related to the length of time 
taken to repay it, and to the interest 
rate charged by the investors or 

lenders. The latter, in turn, is affect- 
ed by two key issues: 

■ The general money market If 

there is a lot of investment (lending) 
money available, it is a borrower's 
market and interest rates fall. But 
when money becomes "tight," bor- 
rowers begin competing for the 
available money, and lenders hold 
out for the best terms. 

■ The security of the loan How 

much risk does the lender see in the 
loan? The manner in which the 
package is presented has a major 
influence, as does the track record 
of those borrowing. This militates in 
favor of professional developers and 
against public-interest groups that 

have little or no vested economic in- 
terest in the project (lenders may 
view them as "do-gooders" who will 
disappear if financial trouble 

The interest rate has a major impact 
on the costs of ownership (and, ul- 
timately, on how attractive the proj- 
ect will be to tenants). But it is often 
difficult for laymen to see just how 
much they must pay for using some- 
one else's money. 

Most loans for real estate improve- 
ment are "level-term" notes which 
are similar to home mortgages. A 
fixed payment is made each month. 
But over the life of the mortgage the 
portion of this amount that is ap- 



Los Angeles 


plied to the principal varies inverse- 
ly with the portion applied to the 
interest. In the beginning, almost all 
of the payment goes to interest. 

To simplify computations in setting 
monthly mortgage payments, lend- 
ers use "constants"; multiplied by 
the amount of the loan and by its 
duration, they yield the annual pay- 
ment. For example, for a loan at 
8.75% interest for 27 years (which 
are good terms today), the related 
"constant" is 0.0987. A little math 
makes it clear that total amount of 
interest paid will be considerably 
more than the principal. The 
amounts involved become even 
more striking when you consider the 
paybacks at different interest rates 
- say 6.5% and 4.25%, which are 
roughly 25% and 50% lower. 

It is thus of greatest importance to 
seek out the best possible interest 
rates. One important principle here 
is that interest rates vary with the 
sort of financing used. Regular 
mortgages taken out by private 
parties or investment groups carry 
the highest rates. Financing instru- 
ments used by public agencies 
(such as revenue bonds or general 
obligation bonds) can give lower 
rates because the investor does not 
have to pay taxes on the interest in- 
come he earns; therefore, he can 
charge a lower rate and still make 
an amount equivalent to that he 
makes on a regular taxable invest- 
ment. Additionally, such bonds are 
considered safer investments since 
they are backed by a government 
for whom it would be a political and 
economic disaster to default. 

Lower interest rates are important 
because they mean lower monthly 
payments; thus, with a given income 
after operating expenses (table B, 
line 8), it is possible to support a 




Total payback Total 



27 years 


















1 ,684,800 



larger debt. As we have seen, even 
a small percent change will have a 
profound effect on annual costs, 
and, therefore, on project feasibility. 

Use of revenue bonds Revenue 
bonds can be used to finance the 
entire project, not only acquisition 
of the property, providing that the 
agency holding and leasing the 
property is a properly constituted 
revenue authority. Such an authority 
can even be created for just that 

There are some difficulties to be ex- 
pected. The first is political and de- 
pends partly upon who is to occupy 
the building. If the revenue authority 
plans to rent income-producing 
space in competition with local real 
estate interests, it may meet resist- 

Second, since revenue authorities 
are public in character, they tend 
to become bureaucratic and lethar- 
gic and may lack the profit incen- 
tive and aggressiveness required to 
make income-producing projects 

However, use of revenue bonds 
should produce a reduction in inter- 
est at least 2% to 3% below private 
market rates. The effect of this is 
shown in table F. Two uses of the 
saving are suggested. Column 2 
shows that the lower interest could 
be used to support a larger debt. In 
column 3, since the supportable 
debt is larger than the project cost, 
less income is needed to pay back 

the smaller actual debt and lower 
rents can be charged. 

Tax-free interest on commercial 
mortgages Municipal bonds carry 
the lowest interest rates of all fi- 
nancing Instruments because the in- 
terest earned on them Is generally 
tax free. It would be unlikely that 
municipalities could use municipal 
bonds to finance restoration proj- 
ects except in those cases where 
the intent is to create a museum or 
other nonprofit use. 

But if the principle of tax-free inter- 
est could be applied to commercial 
mortgages on buildings of historical 
interest, interest costs could be cut 
in half and would be comparable to 
municipal bonds. 

There are precedents for this; in 
some cases the IRS has ruled that 
if the final beneficiary of the loan is 
a public agency, the loan interest 
may be tax exempt. Under certain 
circumstances this ruling has re- 
portedly been used to lower interest 
rates on loans applied to buildings 
leased to public agencies for a long 

The mechanics of getting such a 
ruling are complex. First, there must 
be stringent criteria governing the 
circumstances under which a build- 
ing qualifies (preventing, for in- 
stance, a historic house being con- 
verted to a fast food outlet). Second, 
there have to be specifications 
about what will happen if any future 
owner violates the intent of the ex- 

Table F — Comparison of Conventional and Revenue Bond Financing 

Conventional Financing 
(infeasible alternative from table C) 

Revenue Bond Financing 
Comparable Rents 

Revenue Bond Financing 
Minimum Rents 

Base data Annual figures Results Base data Annual figures Results 

Base data Annual figures Results 

1 Rentable area 16,000 sq ft 

2 Average annual 

rental $10/sq ft 

3 Annual income at 

100% occupancy $160,000 

4 Vacancy loss 97% -4,800 


5 Gross income $155,200 

6 Utilities $18,000 
Maintenance 16,000 
Management 8,000 
Taxes and 

miscellaneous 26,000 

Insurance and other 6,500 

7 Operating expenses $74,500 -74,500 

8 Income after 

operating expenses $ 80,700 

9 Market value 

10 Max. mortgage 

11 Debt service -59,670 

12 Cash throw-off $ 21,030 

13 Max. equity at 10% 
annual return 

14 Max. allowable 
project cost 



16,000 sq ft 


97% -4,800 







$48,500 -48,500 



$1 ,200,0002 

$ 16,7003 


16,000 sq ft 
$8.59/sq ft 


97% -4,000 






$48,500 -48,500 
$ 85,000 

$ 10,0003 



1 Assumes full tax abatement. 

2 Based @ .075 constant rate of amortization (the approximate rate of many revenue bonds). 

3 Used as reserve against early bond retirement. 


emption by destroying the property 
in fact or in spirit. (The simplest re- 
sponse would be to place a new 
and irrevocable zoning classifica- 
tion on the building or to make the 
new owner liable for the back taxes.) 
Unfortunately, the potential for the 
misuse of such a ruling is enormous, 
a truism that the IRS no doubt 

The net effect of obtaining such a 
ruling would be similar to using 
revenue bonds, except that the 
monthly payments would be further 
reduced because an even lower in- 
terest rate would be possible. 

When analyzing project feasibility, 
there is one problem with obtaining 
lower interest rates — whether 
through revenue bonds, tax-free in- 
terest on a commercial mortgage, 
or the good offices of an interested 
investor. The total mortgageability 
of a property is a function of the cap 
rate. Lowered interest rates do noth- 
ing to improve income after operat- 
ing expenses upon which total mort- 
gageability is generally computed. 

(See table B, lines 8-10.) The effect 
of lowered interest is to improve 
cash throw-off (line 12), thus enab- 
ling a project to attract a higher 
equity investment (providing equity 
money is available) and/or to offer 
lower rents. A larger mortgage 
would be obtainable only if the lend- 
ers took a liberal view of the effect 
of lowered interest rates on the loan 
in terms of over all project eco- 

"Goodwill" bonds and debentures 

Any partnership or corporation 
(profit or nonprofit) is legally able to 
issue notes, bonds, or debentures 
to secure loans and raise capital. 
If a community is strongly behind a 
restoration project, it may be pos- 
sible to organize a bond campaign 

in which such notes or debentures 
are sold to the public as "goodwill" 
investments bearing low interest, or 
no interest, or an interest-variable- 

Such goodwill instruments can also 
be used to raise equity capital in 
association with conventional mort- 
gages, although most jurisdictions 
have legal restrictions about such 
uses that must be carefully noted. 

Los Angeles 


In its simplest terms, the sort of 
economic analysis we have been 
doing throughout may be regarded 
as a study of the relationship be- 
tween the money that will go into a 
project and the money that will be 
produced by it. As long as input 
equals or is less than output, all 
should be well. Obviously a favor- 
able change to either side of the 
equation will increase feasibility. 

This chapter deals with how a pro- 
spective developer can seek to max- 
imize output in advance. The most 
efficient tool at his disposal is a 
competent and comprehensive mar- 
ket analysis. An analysis is usually 
made by experts (who have their 
own special techniques), but in the 
case of a nonprofit project it may 
be possible for volunteers to provide 
the legwork under knowledgeable 
direction. Material in this chapter 
was supplied by John Sherwood of 
Hammer, Siler, George Associates, 
an economic consulting firm in 
Washington, D.C. 

Market overview The first step in 
any comprehensive market analysis 
is making an overview to pinpoint 
possible uses which seem to have 
enough potential to warrant further 
study. For a building conservation 
project, the market overview might 
establish whether there is any hope 
at all for selling or leasing space in 

the project and the areas of the 
market in which interest may lie. 

After completing the overview, a de- 
veloper will know how good his 
chances are of having a viable proj- 
ect and, therefore, whether it is 
worthwhile going to the next stage 
of the market study. 

Demand analysis The second step 
is a "demand analysis" to determine 
the size of the local market and the 
characteristics of its demands for 
prospective uses of the property. 
This involves analyzing the basic 
factors affecting the appropriate 
space demand (employment, popu- 
lation, households, household In- 
come, actual sales, etc.), as well as 
development trends of past years. 
Such an analysis provides a detail- 
ed estimate of the demands existing 
today, next year, and perhaps at 
some other future time. 

It is especially important to under- 
stand the underlying economics of 
the local market. Is the job baae 
expanding? Will it continue to ex- 
pand at its present rate? What will 
be the effect of structural changes 
taking place within local industries? 
How will these changes affect 
the demand for apartments, office 
space, retail space or other uses 
proposed for the property? 

Looking at competition The next 
essential step in a real estate mar- 
ket analysis is a rigorous evaluation 
of the competition. This analysis 
serves to determine the extent to 
which the demands of the market 
are now being met; the competitive 
offerings which are planned to meet 
the market demands of the immedi- 
ate future, and the quality of the 
competition (including amenities 
and design features being offered). 
It also seeks out price and concep- 
tual voids in the market which offer 

opportunities for new projects, and 
determines the space preferences 
as indicated by the success or lack 
of success of specific competitive 

Quite specific questions must be 
asked about the competition. Where 
are recent developments (and 
planned ones)? Who is occupying 
the space in them? What are the 
general characteristics of the 
space? What design features are 
being offered? How long are the 
projects taking to rent or sell? 

Location The fourth component of 
a market analysis is an evaluation 
of site and location — how they af- 
fect the ability of the development 
to tap its market 

In conservation projects, the de- 
veloper has no choice of site, but 
he should know how it will affect 
his market. By analyzing the loca- 
tion, he may be able to identify op- 
portunities for certain uses. For in- 
stance, a group of buildings ad- 
jacent to a town's major thorough- 
fare could attract retail shops. 

In addition to affecting the market- 
ability of space, site and location 
also influence the price which the 
developer is willing to pay for the 

Well located space can command 
higher rents or higher sales prices 
than space in a less desirable lo- 

The development program The 

final step in the market analysis is 
the formulation of a concept and a 
development program. A project's 
conceptualization is expressed in 
terms of the market group for which 
the space is to be designed, the na- 
ture of the structure which will ac- 
commodate this space, the over-all 

density of the project, and the gen- 
eral design theme to be established. 

The development program includes 
the amount of space to be develop- 
ed in the structure, the size of the 
units (stores, offices) in square feet, 
and the approximate rent or sale 
price for each type of unit. It also de- 
fines the design features of the 
space and the amenities that must 
be provided in order to give the 
project a competitive edge. In the 
last regard, historic and architec- 
tural character is considered a defi- 
nite plus. 

If the project is large enough to re- 
quire marketing over two or more 
years, the program must include a 
year-by-year staging plan based on 
the estimated absorption rate of 
project space by the market. 

Guide to 
Financing and 


The usability of the foregoing ideas 
will vary from time to time and from 
place to place, depending upon the 
project, conditions in the money 
market, local laws, present owner- 
ship, and a thousand other factors. 
However, there is a systematic pro- 
cedure for finding out what to do 
in a particular case. The developer 

■ Identify possible reuses of the 

■ Identify the need (market) for the 
kinds of spaces the project could 
provide. If previously unrecognized 
needs are uncovered by this proc- 
ess, consider the possibility of 
adapting the structure to those 

■ Develop several alternative plans 
for reuse of the structure. 

■ Review each plan in terms of 
economic feasibility. This will re- 
quire a cost estimate, cash flow pro- 
jections, and over-all economic 
analysis for each plan. 

■ If first analyses show the project 
is not feasible, investigate the vari- 
ous innovative approaches suggest- 
ed in this report. Adopt the most 
promising as part of the develop- 
ment strategy. 

■ Adopt the economic strategies 
suggested or determined by the na- 
ture of the development organiza- 
tion (profit, nonprofit, revenue au- 
thority, etc.). Design the structure of 
the organization and approach the 
proper parties to implement the 
work of the organization. 

The proper team of experts will be 
required to execute these initial 
steps. This team should consist of: 

■ Representatives of the group that 
wants to conserve the building. 

■ The present owners, if coopera- 

■ An architect to prepare the sche- 
matic plans. 

■ A cost-estimator or contractor to 
determine construction costs. 

■ A developer, real estate econo- 
mist, consultant, or mortgage bank- 
er capable of giving opinions on 
economic feasibility. 

On occasion, some team members 
can be located locally who are will- 
ing to work on a voluntary basis or 
for a reduced fee. Funding for these 
initial feasibility studies can be 
sought from federal, state and local 
governments, local service organi- 
zations and clubs, subscriptions, 
local and national foundations, and 
numerous other sources. 

Can Help 

An historical society or other non- 
profit group that has decided to go 
into the development business has 
a lot of options to choose from - 
or combine. As we have seen, many 
of the problems in development 
projects come down to money — 
specifically being able to attract the 
large sums needed for capital costs. 
But although a conservation project 
is often in some ways less econom- 
ically viable than building new, it 
has certain advantages here. 

As noted, most projects require in- 
vestment equity, as well as large 
mortgages. A strictly commercial 
developer can attract that equity 
only by offering a high enough cash 
return on the investment. But as- 
suming a conservation project is 
well thought out, it can be presumed 
to be for the public good (using a 
broad definition). And that allows 
much more leeway for investment 
by governments at all levels, as well 
as by foundations and private com- 
panies or even philanthropic indi- 

In some cases, such as municipal 
revenue bonds, this sort of investor 
will demand some cash return, but it 
will be much lower than the ordinary 
commercial investor seeks. In oth- 
ers, such as government or founda- 
tion grants, no cash return will be 

Make no mistake about this. Every 
investor will require a return on his 
investment. But not all returns are 
in cash. Individuals seek anything 
from their name on a building to the 
feeling of contributing to a favorite 
cause; private firms look for im- 
proved public relations; government 
agencies and foundations demand 
a contribution to the public good 
that relates to their specific man- 

The name of the game is fundrais- 
ing. It can be used by any nonprofit 
group that knows how to do it prop- 
erly and, under somecircumstances, 
by for-profit developers as well. But 
it is important, especially for the 
former, to understand that for devel- 
opment projects fundraising is sim- 
ply a specialized form of seeking 
equity investment and must be sup- 
ported by just as solid economic 
analyses as any other equity search. 

Following are a few tips from ex- 
perts on how certain sources of 
such equity - municipal govern- 
ments, foundations, and federal 
agencies - may be approached, 
combined, and used. Remember, 
too, that a grant of materials or ser- 
vices for which you would otherwise 
have to pay cash can have just as 
favorable fiscal results (by reducing 
capital, operating, or front-end 
costs) as a grant of equity. 

Ned Foss, a real estate consultant 
who advocates cities encouraging 
private renovation and reuse of fine 
old buildings, says, "A city can, 
through urban renewal powers or 
through its own redevelopment cor- 
poration, purchase or take an option 
on a railroad station or other land- 
mark site. At the same time, the 
agency can acquire surrounding 
property so that it can assemble a 
viable plot or remove blight. 

"The city can then fit the building 
into an over-all plan. This both im- 
proves the value of the building and 
also relates it to the existing struc- 
ture of downtown activity. The tech- 
nique requires aggressive rezoning 
rather than spot zoning, street wid- 
ening or demapping to fit into over- 
all traffic patterns or to develop 
malls, and code interpretations in 
order to adapt to the special re- 
quirements of an older structure. 

"These steps also enable the city 
to specify the finished project's as- 
sessed valuation for taxation pur- 
poses; knowing this is very helpful 
since major renovations usually face 
great uncertainties in that regard. 

"In order to assure the desired re- 
use, the city can attach redevelop- 
ment covenants for such specific 
items as the preservation of the fa- 
cade, designation of permissible 
uses, accommodation of Amtrak, 
provision of public spaces, etc. 

"The building can then be turned 
over to the private sector and 'high- 
est bidder' becomes a valid criterion 
for disposition since redevelopment 
responsibilities and restrictions are 
a specific and binding element of 
taking title. The over-all planning 
work undertaken by the government 
will have demonstrated its commit- 
ment to the site and the surrounding 
area, thus having aroused the inter- 
est of the real estate community. 
Any work done ahead of time on 
zoning, valuation, etc., is sure to in- 
crease the value of the property. On 
the other hand, restrictions on how 
a building may be reused could 
lower its value. The government can 
balance these factors in such a way 
as either to minimize the capital 
budget commitment or to make the 
most of the social benefit. 

"The over-all planning concept can 
be carried pretty far. For example, 
a railroad station with development 
covenants can be tied together with 
a vacant tract zoned for high-rise 
development - all of a sudden the 
station becomes economically vi- 
able as part of a larger package. 

"Another point: A railroad station, 
like any large piece of property in 
which the local government has an 
interest, can be acquired and leased 
for the same cost as the city's cost 


of long-term borrowing. Such a 
transaction balances tlie bool<s for 
the municipality, which can decide 
whether or not to charge adminis- 
trative fees or a payment in lieu of 
real estate taxes. (Municipalities 
can often use enabling state legis- 
lation to undertake the whole thing 
outside of their debt limit.) The de- 
veloper who leases the building in 
this manner has substantially lower 
mortgage and/or equity require- 
ments, making the project much 
more attractive to outside investors. 
The land portion would not have 
been depreciable in any case, and 
the lease can be long enough to 
allow for a long-term mortgage." 

Developers plan to create a large pleasant Indoor space that will include restaurants and shops 
Amtrak facilities will be located outside the hall. 


Indianapolis, Ind. 

Union Station 

The city government of Indianapolis 
took some of the steps advocated 
by Foss when it helped developers 
speed negotiations for buying Union 

For 10 years various groups had 
talked with the railroad company 
about buying the station, but none 
of the discussions ever moved into 
real negotiations. In 1971, the mayor 
stepped in to save the building by 
asking the city council to allocate 
$196,666 (the appraised value of the 
station) for a later purchase of the 
station. This tied in with the Indian- 
apolis Metropolitan Development 
Commission's policy of supporting 
conservation in the city's central 
historic area, with particular interest 
in restoring Union Station. 

With the $197,000 committed but 
not spent, the city followed events 
quite closely. Michael Carroll, the 
deputy mayor of Indianapolis, says, 
"After negotiating for about a year, 
the city obtained an option to pur- 
chase the property from the Union 
Belt Railway. Then the development 
commission offered the city's op- 
tion to private developers and non- 
profit groups provided they would 
agree to the city's conditions for 
conservation and subsequent reuse 
of the station. The successful bid- 
der. Union Associates, had to pay 
the city $5,000, which is what had 
been spent to that date from public 
funds. The city then withdrew from 
active involvement and in January, 
1973, the developer began detailed 
negotiations with the railroad com- 
pany to transfer the ownership of 
the property." 

The station is part of a revitalizatlon 
of the downtown area. A convention 
center has been open for two years 

on a block adjacent to the station, 
and offices and hotels are planned 
nearby. The city is funding a three- 
block neighborhood renewal pro- 
gram, which will include many small 
retail businesses. In addition, the 
city market is being restored with 
private foundation funds and a 
sports arena built with private and 
city funds. 

First Floor 

Second Floor 

Third Floor 

(I (I • — -^ 

(I (I • ' 

I <*— T T^ 

(I "^^ — ^^ .MM 


Can Help 

Foundations exist to provide funds 
for people to attempt projects that 
may not bring financial returns. But 
thousands of people apply to foun- 
dations for funds without under- 
standing the limitations of a founda- 
tion's activities or without clearly 
presenting the objectives of their 
own project. Not surprisingly, they 
come away empty handed. How- 
ever, there are techniques for ap- 
proaching foundations that will in- 
crease the chances of success, and 
Edward Protze, of the Moody Foun- 
dation in Galveston, provides a sum- 
mary of advice. 

"Many foundations are not inter- 
ested in conservation because they 
believe that most of the people who 
come to them with such projects 
are interested only in restoration 
and conservation per se. Many of 
us have been turned off by conser- 
vation evangelists who have a long- 
range plan for conserving a build- 
ing, but have not worked out a 
functional adaptive use to justify 
spending our foundation's funds on 
the project. 

"One way to start working out prac- 
tical plans that will be to the public 
benefit is for the group interested 
in conservation to call on the ex- 
pertise of other local nonprofit 
organizations. This is a great oppor- 
tunity for such organizations to work 
together in interlocking arrange- 
ments. Thus they can become the 
catalyst for finding adaptive uses 
and the funds for conservation of 
these buildings. If the nonprofit 
organizations in a community can 
pull together the leadership and 
demonstrate to the foundation that 
they have a sound plan and that the 
community is behind them, they 
stand a much better chance of ob- 
taining funds. 

"You can find out what foundations 
may be interested in your project by 
consulting the Foundation Direc- 
tory. It's probably in your public 
library, but if not, you can find out 
where there's a regional Foundation 
Center library by calling the Foun- 
dation Center in New York City. The 
directory will tell you what founda- 
tions are in your state, what their 
primary purposes and philanthropic 
programs are, and how much they 
give out in grants annually. (The 
Foundation Center also offers vari- 
ous advisory services, such as com- 
puterized searches for foundations 
with specific qualifications; a bro- 
chure describing these is available 
from the Center at 888 Seventh Ave- 
nue, New York, N.Y. 10019.) 

"But once you've located a likely 
foundation (or, better still, several 
of them), you still have to present 
your plan so convincingly as to win 
its support. Here's where communi- 
cations problems sometimes arise. 

"Only a fraction of the 25,000 private 
foundations in the United States 
have professional staff: the bulk of 
the work is done by the trustees, 
family members who are still in- 
volved, and perhaps an accountant 
hired on a part-time basis. 

"So if your group includes people 
who know board members or trus- 
tees of a suitable foundation, they 
should get in touch with them about 
the project. Personal testimony can 
add credibility to a project. On the 
other hand, don't hound the founda- 
tion trustees. And if you don't know 
them, don't send a wire or make a 
personal visit unless you're asked 
to. Write a very good, very clear, 
very specific letter instead. Most 
foundations depend upon written 
communications, and the betteryour 

written communication is, the better 
your chances of getting a grant. 

"When you approach a foundation 
— whether your group has personal 
connections there or not — you've 
got to document your proposal very 
well. By that I mean you have to 
document the credibility of your or- 
ganization — its financial capability, 
its IRS status, and the professional 
and business affiliations of the peo- 
ple that are involved. Naturally, you 
also have to document the project 
that you're asking funds for. To do 
that you must provide a detailed ex- 
planation of your plans (both phys- 
ical and financial), a justification 
of the need, and a statement of what 
other sources of funding you can 
generate — especially from within 
your community — to help support 
the project. 

"This submission has got to be as 
brief as possible (so busy people 
can understand it without wading 
through pages of helter-skelter fig- 
ures, plans, and hopes) and yet 
detailed enough to be believat)le. 
The best way is to start with a tight- 
ly written summary and then attach 
all the detailed lists, each clearly 
labeled and, if necessary, marked 
as to how it relates to the others." 


Can Help 

There are a number of federal agen- 
cies with funds that can be used for 
conserving railroad stations. At first 
glance some of them appear to be 
unlikely sources, and they don't ex- 
actly proclaim "We give aid to rail- 
road stations." However, their list of 
activities may include public works, 
historic preservation, urban renew- 
al, community facilities, transporta- 
tion, economic development, per- 
forming arts, etc. It isn't difficult to 
relate the proposed reuse of a rail- 
road station to the general areas 
encompassed by these activities. 
For instance, if an empty or obso- 
lescent station is located in a part 
of town that needs a bus terminus 
and a youth center, a developer 
should approach those agencies 
active in transportation and com- 
munity facilities. 

Tersh Boasberg, a Washington law- 
yer with wide experience of dealing 
with federal funding agencies, rec- 
ommends that groups or individuals 
should first learn as much as pos- 
sible about federal or foundation 
sources before making any propo- 
sals. He says, "All federal agencies 
have different legislation, programs, 
regulations, budgets, purposes, key 
words, and people. About the only 
thing common to all is a fiscal year 
that starts July 1st. Each agency 
publishes information that needs to 
be examined carefully, although 
what you are looking for isn't always 

"You'll get to know that certain 
agencies are more informative than 
others, just as some are more poli- 
tical than others. However, I find at 
least 99% of the federal agency 
money goes out in nonpolitical 
ways. This is almost unbelievable, 
but generally speaking grant deci- 
sions are made by middle manage- 
ment people who are nonpolitical. 

"You should ascertain whether an 
agency's money is disbursed from 
its Washington office or from its 
regional offices. Know which pro- 
grams operate at the state level and 
which operate out of Washington 
directly. It doesn't do any good to 
ask someone in the Department of 
Interior for money if he has to say, 
'I award it to the states; go see your 
state conservation officer.' 

"In addition to federal programs, 
you should look for state or local 
programs. There are a number of 
states that award grants to private 
groups from their federally-funded 
programs, such as Hawaii, Massa- 
chusetts and New York; most also 
have various sorts of agencies with 
funding programs from the state 
coffers. Tourism programs are often 
funded at the state level, and rail- 
road stations can be good tourist 

"While you're running down possi- 
ble sources of funding, you also 
have to think about how to present 
your own organization properly. 
Federal, state, and city officials are 
interested in groups that have wide- 
spread community support. In order 
to compete in city hall for limited 
city funds you have to be able to 
talk to the mayor or the city council, 
not out of sentimentality for a build- 
ing, not out of pride in the commu- 
nity, but in dollars, numbers, votes, 
and power. For that, you have to 
have the strength of citizen involve- 
ment at all levels. And be sure to 
involve local businessmen because 
there's nothing more impressive to 
a government official than to see a 
businessman who is prepared to put 
money into a proposed project. 

"Putting together a sound knowl- 
edge of your organization and an 
agency's funding program is the 

first, and perhaps most important 
step in developing a strategy to get 
your funds. This is an essential deci- 
sion — often a series of decisions. 
Don't be afraid of using a different 
strategy and a different proposal for 
every agency you talk to. Go after 
each agency for what it can do for 
you. If you tell a Farmers Home Ad- 
ministration county supervisor that 
you want to renovate a railroad sta- 
tion, he's going to think you're from 
Mars. So instead, you talk about 
your interest in developing busi- 
nesses in rural areas that are losing 
population. By coincidence, the 
proposed business will just happen 
to be located in a railroad station. 

"In summary, you have to under- 
stand an agency's concerns, inter- 
ests and limitations, and then pre- 
sent a proposal offering a definite 
program that makes economic 
sense to the person reading it. Re- 
member, you cannot play on senti- 
mentality, you've got to emphasize 
feasibility. Some people think the 
federal government helps every- 
body in the world, and therefore it 
ought to help them. It's not true. The 
federal government — indeed, gov- 
ernment at any level - will only help 
when there are compelling reasons 
for it to make funds available for 
your project." 

The following pages list the federal 
programs offering some form of 
assistance that might be tapped for 
projects reusing a railroad station. 
It was prepared by Ann Webster 
Smith, Director, Office of Compli- 
ance, Advisory Council on Historic 
Preservation. (The council was 
established in 1966 to serve as the 
government's advisor on all proper- 
ties listed in the National Register 
of Historic Places that could be af- 
fected by any kind of federal or 
federally-funded undertaking.) 


The federal government says it 
wants to improve rail services for 
passengers, so it is not surprising 
that the Advisory Council is particu- 
larly anxious to help preserve archi- 
tecturally and historically worth- 
while stations that also contain fa- 
cilities for rail passengers. Hence 
Smith suggests that Amtrak (which 
owns no stations) could play a sig- 
nificant role in resolving the future 
of stations that it serves since it has 
to rent space in them. In fact, a de- 
veloper could sign Amtrak as the 
first tenant and so provide an eco- 
nomic foundation for determining 
the project to be feasible. 

Department of Agriculture 

Program or activity: Farmers Home 
Administration (FHA) — Community 

Type of assistance: Grants 

Objective: To provide grants to lo- 
cal governments and other political 
subdivisions to facilitate the devel- 
opment of business enterprises in 
rural areas. Projects must result in 
the immediate development of pri- 
vate business or industrial enter- 

Eligibility: Local governments and 
other political subdivisions, such as 
districts and authorities. Projects 
may not be within the boundary of a 
city with a population of more than 
50,000, or an urban area with a pop- 
ulation density of more than 100 per- 
sons per square mile. 

Comments: Grants can be made to 
cover the cost of acquiring and de- 
veloping land and/or existing facili- 
ties, for providing support facilities 
such as gas or electric service lines, 
for fees and costs for legal, engi- 
neering, fiscal, advisory, recording 
and planning services. The develop- 
ment of support facilities on a rail- 

road station site as a means for 
attracting business and industry to 
the site might be eligible for funding 
under this program. This is a fairly 
new program and has not been 
used, to date, in connection with 
rail station projects. 

Contact: County Office of the 
Farmers Home Administration, U.S. 
Department of Agriculture. 

Department of Agriculture 

Program or activity: Farmers Home 
Administration (FHA) - Community 

Type of assistance: Loans 

Objective: To make available loans 
to local governments, other political 
subdivisions of states, and nonprofit 
organizations, for constructing, en- 
larging, extending, or otherwise im- 
proving community facilities in rural 

Eligibility: Local governments, oth- 
er political subdivisions of states 
(such as districts and authorities), 
and nonprofit corporations. Loans 
to private nonprofit organizations 
are available provided they meet 
certain rigid program requirements. 
Loans must be used to develop fa- 
cilities in rural areas and towns of 
up to 10,000 people. 

Comments: A public agency or a 
nonprofit organization could re- 
ceive such FHA Community Facili- 
ties loan monies for the adaptive 
use of railroad stations as, for ex- 
ample, community libraries, court- 
houses, or public recreation areas. 
Borrowers must be unable to obtain 
the necessary funds for such activi- 
ties from other sources at reason- 
able rates and terms. This, too, is a 
relatively new program and one 
which has not yet been applied to 
specific rail reuse projects. 

Contact: County Office of the 
Farmers Home Administration, U.S. 
Department of Agriculture. 

Department of Agriculture 

Program or activity: Farmers Home 
Administration (FHA) - Business 
and Industrial Loans 

Type of assistance: Loans 

Objective: To provide loans to any 
legal entity, including individuals, 
public and private organizations to 
support development or expansion 
of business, industry, and other 
sources of employment. 

Eligibility: Local governments, and 
other political subdivisions of states, 
(such as districts and authorities), 
profit-making and nonprofit organi- 
zations, and individuals. The project 
should be within rural areas or cities 
of up to a 50,000 population with 
priority to applications for projects 
in rural communities and towns of 
25,000 and smaller. 

Comments: The program offers 
promise to those interested in the 
development and reuse of railroad 
stations since loans can be applied 
to the cost of acquisition and devel- 
opment of land and/or existing fa- 
cilities. Although the program has 
not yet been used for such pur- 
poses, any legal entity should be 
eligible for such loans for railroad 
station projects since the program 
specifically authorizes monies for 
business and industrial acquisition, 
conversion, modernization, and 

Contact: County Office of the 
Farmers Home Administration, U.S. 
Department of Agriculture. 


Regional Commission 

Program or activity: Supplements 
to Federal Grant-in-Ald; State Re- 
search, Technical Assistance, and 
Demonstration Projects 

Type of assistance: Grants 

Objective: To provide supplemen- 
tal funds to increase the Federal 
appropriation for projects of con- 
struction, land acquisition, and/or 
equipment for eligible applicants, 
who cannot, because of their eco- 
nomic situation, supply the required 
matching share of the basic federal 

To expand the knowledge of the re- 
gion to the fullest extent possible by 
means of state-sponsored research, 
including investigations, studies, 
and demonstration projects. 

Eligibility: States and through the 
states, their subdivisions and instru- 
mentalities, and private nonprofit 

Comments: ARC funds might be 
used as supplemental grants for the 
restoration, rehabilitation or im- 
provement of facilities such as rail- 
road stations if such grants meet 
the purposes of the state's rede- 
velopment plans and if non-federal 
sources have supplied at least 20% 
of eligible development costs. 

ARC funds have been used for proj- 
ects for the restoration of public 
buildings and might well be used for 
feasibility studies on railroad sta- 
tion proposals if they could be char- 
acterized as beneficial to the eco- 
nomic and social development of an 

Contact: Executive Director, Ap- 
palachian Regional Commission, 
1666 Connecticut Avenue, N.W., 
Washington, D.C. 20235 

Department of Commerce 

Program or activity: Economic De- 
velopment Administration (EDA) - 
Public Worl<s and Development Fa- 
cilities — Long-term Employment 

Type of assistance: Grants and 

Objective: To give grants and 
loans to state and local govern- 
ments, and public/private nonprofit 
organizations for public work proj- 
ects intended to improve opportun- 
ities for the establishment or expan- 
sion of business or industry or 
otherwise assist in the creation of 
employment for the unemployed or 
persons with low incomes. 

Eligibility: State and local govern- 
ments, including Indian tribes, and 
public and private nonprofit organi- 
zations. The project must be located 
in an administration-designated re- 
development area or economic de- 
velopment center. 

Comments: This program can pro- 
vide basic grants to cover up to 50% 
of the cost of acquiring and devel- 
oping land or the cost of acquiring, 
constructing or renovating facilities 
including machinery and equip- 
ment. The program can provide 
loans in conjunction with grants 
usually only in those cases where 
applicants are unable to provide the 
local share of matching funds from 
other sources. 

Contact: Office of Public Affairs, 
Economic Development Administra- 
tion, U.S. Department of Commerce, 
Washington, D.C. 20230 

Department of Commerce 

Program or activity: Business De- 
velopment Loans 

Type of assistance: Loans 

Objective: To provide long-term, 
low-interest loans to individuals. 
State and local governments and 
local development groups to help 
establish new businesses or expand 
existing firms in designated areas. 

Eligibility: Individuals, state and lo- 
cal governments. The applicant 
must be approved by an agency of 
the state or political subdivision 
directly concerned with the eco- 
nomic development of the area. A 
business must be located in a desig- 
nated redevelopment area or eco- 
nomic development center. 

Comments: Such loans might be 
used in establishing businesses in 
railroad stations converted to an- 
other use if the project is such that 
it creates new sources of employ- 
ment and if it does not involve the 
relocation of existing businesses. 

Contact: Director of Business De- 
velopment Loans, U.S. Department 
of Commerce, Washington, D.C. 

Department of Commerce 

Program or activity: Economic De- 
velopment Administration (EDA) — 
Technical Assistance Program 

Type of assistance: Grants and 

Objective: To provide planning as- 
sistance to individuals, state and 
local governments, and nonprofit 
organizations, in the form of ser- 
vices and grants to finance econom- 
ic development planning. 



Eligibility: Individuals, state and lo- 
cal governments, and nonprofit or- 

Comments: Planning assistance 
can take the form of resource sur- 
veys, feasibility studies and prelim- 
inary design plans all of which 
might apply to station projects. 

Contact: Office of Public Affairs, 
Economic Development Administra- 
tion, U.S. Department of Commerce, 
Washington, D.C. 20230 

Department of Commerce 

Program or activity: Economic De- 
velopment Administration (EDA) — 
Public Works and Development Fa- 
cilities — Public Works Impact Pro- 

Type of assistance: Grants 

Objective: To provide grants for 
public works projects, in areas of 
high unemployment, to state and 
local governments and nonprofit or- 
ganizations. The program is a sub- 
sidiary of the program of grants and 
loans for Public Works and Develop- 
ment Facilities. 

Eligibility: State and local govern- 
ments, and nonprofit organizations. 
The project must be located in an 
area of an unemployment rate of 
8% or more, during the latest three- 
month period for which statistics are 
available from the Department of 

Comments: This program, a part of 
a broad program of grants and loans 
under the Public Works and Devel- 
opment Facilities activity of EDA, 
can make grants of 80% of the cost 
of land acquisition or acquisition, 
construction or renovation of facili- 
ties. Rail station projects are eli- 
gible for funding if there is a particu- 
lar need which they might fill in the 

area and if the cost of labor will 
represent a substantial proportion 
of the project's total cost. The pro- 
gram gives priority to projects that 
would benefit the long-term unem- 
ployed or low income groups and to 
projects that would create a long- 
term opportunity for the establish- 
ment or expansion of business and 
industry. The future of the program 
is uncertain; however, if it is con- 
tinued and if funding for it is in- 
creased it is a promising source of 
funding for rail station projects such 
as that in St. Louis, County, Minne- 
sota, which received a $352,000 
grant for the acquisition and reno- 
vation of Duluth's Union Depot, an 
1892 Norman-style railroad station 
which will be converted into a cul- 
tural center to include railroad and 
industrial museums. 

Contact: Office of Public Affairs, 
Economic Development Administra- 
tion, U.S. Department of Commerce, 
Washington, D.C. 20230 

Department of Housing 
and Urban Development 

Program or activity: Open Space 
Land Program (discontinued) 

Note: This program was discontin- 
ued by HUD in January of 1973. 

Type of assistance: Grants 

Objective: To provide grants to 
state and local public bodies to ac- 
quire, improve, and restore areas 
and sites and structures of archi- 
tectural or historic value. 

Note: This program was discontin- 
ued by HUD in early 1973. Although 
no new projects have been approv- 
ed, funding is possible in areas of 
ongoing urban renewal, neighbor- 
hood development, and code en- 
forcement projects. 

Typeof assistance: Loansand 

Objective: To provide loans and 
grants to repair and rehabilitate 
properties within the boundaries of 
federally assisted urban renewal, 
neighborhood development or code 
enforcement projects. 

Eligibility: To sponsor a project: 
Agencies of state or local govern- 
ments administering federally as- 
sisted urban renewal, neighborhood 
development or code enforcement 

For loans: Owners or purchasers 
under installment contracts, and for 
nonresidential loans only, tenants of 
nonresidential properties; all prop- 
erties to be rehabilitated must be 
within the boundaries of one of the 
specified types of projects. 

For grants: Owner-occupants of res- 
idential buildings with no more than 
4 dwelling units or occupants pur- 
chasing such buildings under in- 
stallment contracts. Buildings must 
be within boundaries of one of the 
specified types of projects. 

Contact: Assistant Secretary for 
Community Planning and Develop- 
ment, U.S. Department of Housing 
and Urban Development, Washing- 
ton, D.C. 20410 

Department of Housing 
and Urban Development 

Program or activity: Comprehen- 
sive Planning and Management 

Type of assistance: Grants 

Objective: To provide grants to 
states, metropolitan area and plan- 
ning agencies, cities having popula- 
tions of 50,000 or more and Indian 
tribal bodies. Grants are also made 


through States to counties, smaller 
cities, local development districts, 
and economic development dis- 
tricts. This program is popularly 
known as the "701" program. A 
broad range of planning and man- 
agement activities may be support- 
ed by these grants. 

Eligibility: State, metropolitan area 
and planning agencies and cities 
with populations of 50,000 or more 
apply directly to HUD. Counties, 
smaller cities and other planning 
jurisdictions apply through state 

Comments: Funding may be avail- 
able for surveys of architecturally 
and historically significant rail sta- 
tions, for a study of the present or a 
potential relationship between an 
historically or architecturally signifi- 
cant station and other components 
of comprehensive planning In an 
area, or in order to provide prelimin- 
ary cost estimates on station prop- 
erty rehabilitation proposals. As an 
example of the sort of activity which 
is possible under the "701" pro- 
gram, in Natchez, the Mississippi 
Research and Development Center 
received a grant for an historic re- 
source survey and inventory for a 
designated area of Natchez. 

Contact: Assistant Secretary for 
Community Planning and Develop- 
ment, U.S. Department of Housing 
and Urban Development, Washing- 
ton, D.C. 20410 

Department of Housing 
and Urban Development 

Program or activity: Urban Renew- 
al — Neighborhood Development 
Program (discontinued) 

Note: This program was discontinu- 
ed by HUD in January of 1973. Al- 
though no new projects will be fund- 

ed, changes in an ongoing urban 
renewal project, such as plans to 
incorporate historic preservation 
activities, usually will be approved 
if no increase in the project budget 
would result. 

Type of assistance: Loans and 

Objective: To provide loans, grants, 
and advances to state and local pub- 
lic agencies authorized to carry out 
projects for the redevelopment of 
deteriorated urban areas. 

Eligibility: State or local public 
agencies authorized to enter into 
contracts with the federal govern- 
ment for urban renewal aid. 

Contact: Assistant Secretary for 
Community Planning and Develop- 
ment, U.S. Department of Housing 
and Urban Development, Washing- 
ton, D.C. 20410 

Department of Housing 
and Urban Development 

Program or activity: Community De- 
velopment Block Grants (proposed) 

Note: This program would replace a 
number of categorical grant pro- 
grams now subject to HUD's mora- 
torium on additional funding. These 
include the Open Space Land Pro- 
gram, the Urban Renewal Programs 
(including Neighborhood Develop- 
ment), and the Rehabilitation Loan 
and Grant Program. 

Type of assistance: Grants 

Objective: These community de- 
velopment grants could be used for 
any purposes eligible under the ca- 
tegorical grant programs being re- 
placed, including acquisition, reha- 
bilitation, and improvement of his- 
toric properties. 

Eligibility: Central cities in Stand- 
ard Metropolitan Statistical Areas, 

cities of more than 50,000 persons, 
urban centers of more than 200,000 
persons; for first five years, other 
communities able to qualify for 
funding under the "hold harmless" 
provision because of active model 
cities program or urban renewal 
projects approved from 1968-72; 
and other communities selected by 
the state for receipt of the state's 
discretionary funds. 

Comments: Under current propos- 
als for the Community Development 
Block Grant program, substantial 
federal monies will be made avail- 
able for conservation funding on a 
matching basis. Railroad station 
adaptive reuse projects may be able 
to receive grants under this program 
by working through the chief execu- 
tive officer in each SMSA. Those in- 
terested in conservation projects 
including those relating to railroad 
stations should seek funds under 
this program. 

Contact: Assistant Secretary for 
Community Planning and Develop- 
ment, U.S. Department of Housing 
and Urban Development, Washing- 
ton, D.C. 20410 

Department of the Interior 

Program or activity: National Park 
Service — National Register Historic 
Preservation — Grants-in-Ald 

Type of assistance: Grants (match- 

Objective: To provide grants to as- 
sist the states and territories in con- 
ducting surveys to identify historic 
resources, preparing and imple- 
menting State Historic Preservation 
Plans, and acquiring and develop- 
ing properties included in the Na- 
tional Register. Funded projects 
must conform to State Historic Pres- 
ervation Plans and annual programs 


approved by the National Park Ser- 

Grants are also made to the Na- 
tional Trust to support a wide variety 
of organizations activities. 

Eligibility: States and territories op- 
erating under programs adminis- 
tered by a State Liaison Officer for 
Historic Preservation appointed by 
the Governor, and the National Trust 
for Historic Preservation. Benefici- 
ary eligibility includes private and 
public owners of historic property 
listed on the National Register of 
Historic Places. 

Comments: Under this grants pro- 
gram, the Petoskey, Michigan, C&O 
Railroad Station received a $7,403 
grant for structural repairs as part 
of a program of converting the sta- 
tion into a museum. 

The National Park Service antici- 
pates an increase in requests for 
funding railroad station conserva- 
tion projects under its historic pres- 
ervation grants program. 

Contact: National Park Service, Di- 
vision of Grants 

Department of the Interior- 
Department of Agriculture 
(Joint Program) 

Program or activity: Youth Conser- 
vation Corps 

Type of assistance: Employment 

Objective: To provide summer em- 
ployment for youth on conservation 
projects. Under the Interior Depart- 
ment, youth are employed to carry 
out conservation activities on land 
under the jurisdiction of the Depart- 
ment'c land managing agencies. In 
1974, the program for the first time 
included assistance for conserva- 
tion activities on non-federal lands. 


Projects may be operated directly 
by the Department of Interior or De- 
partment of Agriculture, or on a con- 
tractual basis by nonprofit organiza- 

Eligibility: Permanent residency in 
the United States, for youth between 
the ages of 15 and 18. Contracts to 
operate projects on federal land are 
available to State and local govern- 
ments and private nonprofit organi- 
zations in existence for at least five 

Comments: Although it is difficult 
to involve YCC participants in proj- 
ects such as railroad station adap- 
tive reuse, such participation seems 

Contact: Chief Division of Youth 
Conservation Programs, National 
Park Service, U.S. Department of 
the Interior, Washington, D.C. 20240 

National Endowment 
for the Arts 

Program or activity: Architecture + 
Environmental Arts Program - Pub- 
lic Education and Awareness 

Type of assistance: Grants 

Objective: To give grants to indi- 
viduals, nonprofit organizations, 
state and local governments for the 
preparation of educational material 
in a variety of media intended to 
foster public awareness of the des- 
ignated environment. Usually, or- 
ganizations are required to provide 
at least 50% of the total project cost 
from non-federal sources. 

Eligibility: Individuals of exception- 
al talent, units of state and local 
governments, and nonprofit organi- 

Comments: The Endowment has 
made grants for several projects re- 
lating to the conservation of railroad 

stations including a $20,313 grant to 
Roger Hagan for his documentary 
film on creative uses of railroad sta- 
tions; grants to Educational Facili- 
ties Laboratories for the preparation 
of Reusing Railroad Stations and 
this publication resulting from the 
Indianapolis July 22-23 Conference 
on Reuse of Railroad Stations; a 
$3,260 grant to a New Jersey gradu- 
ate student for a survey of railroad 
stations in that state in order to de- 
termine their suitability for acquisi- 
tion and use as cultural activity cen- 

Contact: Assistant Director, Archi- 
tecture + Environmental Arts Pro- 
gram, National Endowment for the 
Arts, Washington, D.C. 20506 

National Endowment 
for the Arts 

Program or activity: Archtecture + 
Environmental Arts Program - Na- 
tional Theme Awards Programs 

Type of assistance: Grants 

Objective: To give grants to indi- 
viduals, nonprofitorganizations, and 
state and local governments for 
planning and organizing projects 
and programs in the field of archi- 
tecture and urban design. 

Eligibility: Individuals of exception- 
al talent, units of state and local 
governments, and nonprofit organi- 

Comments: This program has 
granted up to $80,000 to communi- 
ties for innovative and creative proj- 
ect approaches in theme areas such 
as City Edges and City Options. 

Contact: Assistant Director, Archi- 
tecture + Environmental Arts Pro- 
gram, National Endowment for the 
Arts, Washington, D.C. 20506 

National Endowment 
for the Arts 

Program or activity: Architecture + 
Environmental Arts Program — Pro- 
fessional Education and Develop- 
ment Program 

Type of assistance: Grants 

Objective: To give grants to indi- 
viduals, institutions of higher educa- 
tion, and nonprofit organizations to 
support basic research in building 
design and to improve the educa- 
tion of design professionals. A 
broad range of activities is eligible, 
including curriculum development 
and recruitment and student sup- 
port programs. 

Eligibility: Individuals of exception- 
al talent, units of state and local 
governments, and nonprofit organi- 

Comments: Under this program, 
grants can be made to specific con- 
servation-related activities includ- 
ing, perhaps, those related to rail- 
road station reuse, and might be 
used for research in building design 
and in the preparation of restoration 
plans for certain types of buildings. 

Contact: Assistant Director, Archi- 
tecture + Environmental Arts Pro- 
gram, National Endowment for the 
Arts, Washington, D.C. 20506 

National Endowment 
for the Humanities 

Program or activity: Grants for Re- 
search in the Humanities 

Type of assistance: Grants 

Objective: To give grants to indi- 
viduals and nonprofit organizations 
for humanities projects involving 
original thought, basic research, in- 
terpretive writing and editing. Under 
its fellowship programs, the Endow- 

ment also supports individual re- 
search and short-term study proj- 
ects. The research projects are 
more frequently collaborative efforts 
extending over a longer period of 
time. (Note: There are several pro- 
grams under the Public Programs 
Division, as Film and TV grants, Mu- 
seums and Historical Society funds, 
and Special Projects, which are 
concerned with making the humani- 
ties available to the public through a 
variety of media and institutional 
channels. These programs might 
provide financial assistance for the 
publication and dissemination of in- 
formation reuse depending upon 
the scope and nature of the particu- 
lar project or study.) 

Eligibility: Citizens of the United 
States or its possessions and non- 
profit organizations engaged in hu- 
manistic endeavors. 

Comments: The Endowment for the 
Humanities is especially interested 
in projects that bear on major issues 
of contemporary concern. It should 
be noted that the Endowment does 
not provide funding assistance to 
cover construction or restoration 

Contact: Applications Officer, Divi- 
sion of Research Grants, National 
Endowment for the Humanities, 
Washington, D.C. 20506 

Regional Development 

Program or activity: Technical As- 
sistance Grants 

Type of assistance: Grants 

Objective: To give grants to state 
and local governments and private 
organizations to finance planning 
activities related to economic devel- 
opment (including research, feasi- 
bility studies, and other analyses — 

demonstrations and training pro- 
grams). Technical assistance grants 
may cover such costs as salaries 
and fees, equipment, materials and 
supplies. Grants may cover the en- 
tire cost of the project or may be 
combined with funds from other 

Eligibility: State and local govern- 
ments, public and private nonprofit 
organizations for projects that can 
further the commission's objectives. 

Comments: Railroad station reuse 
projects could be funded if such 
projects were consistent with a com- 
mission's economic development 
goals for the area. For example, the 
Upper Great Lakes Regional Com- 
mission provided a $200,000 supple- 
mental grant for use in converting 
Duluth's Union Depot into the city's 
new cultural complex, a $2.5-million 
project which received other fund- 
ing from private foundations, indi- 
vidual and corporate donations, and 
several Federal programs. 

Also, Northeast Regional Commis- 
sion gave $100,000 in grants to the 
city of Lowell, Massachusetts, for its 
"center city development program" 
to revitalize the city's core area. 

Contact: Director of Regional Eco- 
nomic Coordination, U.S. Depart- 
ment of Commerce, Washington, 
D.C. 20230 

Regional Development 

Program or activity: Supplements 
to Federal Grants-in-Aid 

Type of assistance: Supplementary 

Objective: To provide supplemen- 
tary grants to state and local gov- 
ernments to help them meet match- 
ing requirements for Federal grants- 



in-aid programs. These grants may 
be combined with federal program 
grants to a total of 80% of the proj- 
ect costs. 

There are seven regional develop- 
ment commissions (in addition to 
the Appalachian Regional Commis- 
sion, an independent agency of the 
federal government) which repre- 
sents multi-state economic develop- 
ment regions. Regional commis- 
sions are: The Coastal Plains Com- 
mission, the Four Corners Regional 
Commission, the New England Re- 
gional Commission, the Old West 
Regional Commission, the Ozarks 
Regional Commission, the Pacific 
Northwest Regional Commission, 
and the Upper Great Lakes Regional 
Commission. These commissions 
are a joint undertaking of state gov- 
ernments and the federal govern- 
ment, and federal financial support 
and policy guidance are provided 
through the Department of Com- 

Eligibility: State and local govern- 
ments with insufficient financial re- 
sources. The recipient must be qual- 
ified to receive a federal grant for a 
project that meets the Commission's 

Contact: Director of Regional Eco- 
nomic Coordination, U.S. Depart- 
ment of Commerce, Washington, 
D.C. 20230 

Small Business Administration 

Program or activity: Business 
Loans; Economic Opportunity Loans 

Type of assistance: Loans 

Objective: To provide loans to 
small businesses to cover costs of 
constructing, converting, and ex- 
panding business facilities (includ- 
ing purchase of land, buildings, ma- 
chinery and equipment) and for 

working capital. Economic Oppor- 
tunity Loans are specifically for low- 
income or disadvantaged persons 
who have lacked one opportunity to 
start or strengthen a small business 
and are subject to more flexible 
credit requirements than loans 
under the Business Loan Program. 
Usually, Business Loans are from 
banks or other approved lending in- 
stitutions and are guaranteed by the 
SBA up to 90%. Business Loans are 
made directly by SBA only when 
participation with banks is not pos- 
sible, and are subject to the availa- 
bility of federal funds and may not 
exceed $100,000. 

Eligibility: Independently owned 
small businesses in the United 
States or its territories and posses- 
sions that are not dominant in their 
fields, that cannot obtain private fi- 
nancing on reasonable terms, that 
are ineligible for financing from 
other government agencies, and 
that qualify as "small" under SBA's 
size standards. 

Comments: These loans would 
seem to be especially appropriate 
for those who are seeking assis- 
tance in converting a building such 
as a former railroad station into a 
viable office or commercial space. 
SBA Business Loans ranging in size 
from $18,000-$40,000 assisted in fi- 
nancing the adaptive use of historic 
buildings which are now functioning 
as commercial enterprises in Alex- 
andria, Virginia. 

Contact: Office of Community De- 
velopment, Small Business Adminis- 
tration, 1441 L. Street, N.W., Room 
818, Washington, D.C. 20416 

Small Business Administration 

Program or activity: State and Lo- 
cal Development Company Loans 

Type of assistance: Loans 

Objective: To provide loans to 
state development companies to 
help them provide equity capital and 
long-term loans to small business- 
es. Loans are also available to local 
development companies for con- 
struction, conversion, or expansion 
of business facilities including pur- 
chase of land, buildings, equipment, 
and machinery. 

Eligibility: Local development com- 
pany loans: profit-making or non- 
profit corporations formed to pro- 
mote and assist the growth and de- 
velopment of small businesses that 
have a maximum of 25 stockholders 
or members and that are at least 
95% owned by persons living or 
doing business in the individual 
community served. 
State development company loans: 
a corporation organized under or 
pursuant to a special act of the state 
legislature with authority to operate 
statewide, and to assist the growth 
and development of business con- 
cerns in its area. 

Comments: Local Development 
Corporations might assist a com- 
munity in the acquisition or im- 
provement of a railroad station 
which could then be leased or sold 
to a small business. Participation 
loans under the Local Development 
Corporation programs have been 
used for the purchase and restora- 
tion of historic structures which 
have subsequently been used for 
profit-making activities. 

Contact: Office of Community De- 
velopment, Small Business Adminis- 
tration, 1441 L. Street, N.W., Room 
818, Washington, D.C. 20416 


Tennessee Valley Authority 

Program or activity: Operation 
Town lift 

Type of assistance: Planning Ser- 

Objective: To make available to 
communities planning services, pro- 
vided by a staff of TVA professionals 
in the Tennessee River Valley area. 

Eligibility: Communities in the Ten- 
nessee River Valley area. 

Comments: TVA's Operation Town- 
lift, through which TVA's profes- 
sional staff assists communities in 
the Tennessee River Valley area 
with planning services, might be of 
assistance with railroad station re- 
use projects located in that part of 
the country. This program assisted 
one small Mississippi town by pro- 
viding preliminary plans for the con- 
version of the community's 19th 
century courthouse into a museum 
and information center on the basis 
of which the town sought (and re- 
ceived) an historic preservation 
grant from HUD. 

Contact: General Manager, Ten- 
nessee Valley Authority, Knoxville, 
Tennessee 37901 

Department of Transportation 

Program or activity: Federal Avia- 
tion Administration (FAA) — Airport 
Airways Development Program 

Type of assistance: Grants 

Objective: To assist public agen- 
cies in the development of a nation- 
wide system of public airports and 
airways to meet the needs of civil 

Eligibility: State, county, municipal, 
and other public agencies if their 
airport requirements are shown in 
the National Airport System Plan. 

Comments: During the past five 
years, the FAA has also investigated 
the feasibility of constructing heli- 
port areas in multi-level intercity 
transportation complexes. FAA may 
well be prepared to expend funds 
for that portion of the transportation 
center including, perhaps a railroad 
station, used as a heliport, although 
such heliport areas in intercity 
transportation are yet to be fully 
demonstrated as viable. 

Contact: Development Programs 
Division, Federal Aviation Adminis- 
tration, Department of Transporta- 
tion, Washington, D.C. 20590 

Department of Transportation 

Program or activity: Urban Mass 
Transit Administration 

Type of assistance: Capital Grants; 
Technical Study Grants; Loans 

Objective: To assist in financing 
the acquisition, construction, recon- 
struction, and improvement of facil- 
ities and equipment for use, by op- 
eration, lease or otherwise, in mass 
transportation service In urban 
areas and in coordinating service 
with highway and other transporta- 
tion in such areas. 

The technical study grants bridge 
the gap between federally assisted 
transportation planning of an over- 
all nature and federally assisted 
capital investment in mass transpor- 
tation systems and equipment. 
Grants can be used for economic 
feasibility studies, capital improve- 
ment, engineering and architectural 
surveys, in preparation for improve- 
ments in mass transit systems. 

Eligibility: Public agencies or pri- 
vate transportation companies 
through contractual arrangements 
with a public agency. 

Comments: Technical study grants 
are available for economic feasibil- 
ity studies which might include rail- 
road station reuse or, engineering 
or architectural surveys of historic- 
ally significant railroad stations as 
one element in a program of im- 
provements in a mass transit sys- 
tem. For example: Efforts to pre- 
serve and rehabilitate the San Diego 
Santa Fe Depot will be aided by a 
$1.5 million grant from UMTA. The 
city will turn the depot into a trans- 
portation complex including trains, 
buses, airport ticketing facilities 
and connections and tourist ser- 
vices as well as shops and a res- 
taurant. It is important to note that 
UMTA can fund only those areas of 
the project which involve transit ac- 
tivities. Private developers will in- 
vest $3.8 million in the project which 
will cost an estimated $5.8 million. 

Contact: Associate Administrator, 
Office of Programs Operations, Ur- 
ban Mass Transit Administration, 
Department of Transportation, 
Washington, D.C. 20590 

Department of Transportation 

Program or activity: Federal High- 
way Administration — Federal Aid 
Highway Program 

Type of assistance: Grants 

Objective: To assist State Highway 
Departments in constructing the in- 
terstate highway systems and for 
building or improving primary, sec- 
ondary, and urban systems roads 
and streets. Funds can be used for 
planning, right-of-way acquisition, 
new construction, improvement, 
road beautification, etc. 

Eligibility: State Highway Depart- 
ments. The states apportion certain 
state and federal funds to related 
local public bodies. 


Comments: Section 142 of the Fed- 
eral Aid Highway Act of 1973 per- 
mits funding of bus-auto terminals 
within the general category of pas- 
senger loading and parking facili- 
ties. Yet to be resolved is the ques- 
tion as to whether extensive bus ter- 
minals (perhaps former railroad sta- 
tions) lie within the statute's author- 
ization to build "bus passenger 
loading areas and facilities, includ- 
ing shelters." 

Contact: Urban Planning Division, 
Federal Highway Administration, 
Department of Transportation, 
Washington, D.C. 20590 

Department of the Treasury 

Program or activity: General Rev- 
enue Sharing 

Type of assistance: 


Quarterly pay- 

Objective: To make quarterly pay- 
ments to states and certain local 
governments for capital expendi- 
tures authorized under state and 
local laws for operating and main- 
tenance expenditures under the fol- 
lowing categories: environmental 
protection, financial administration, 
health, libraries, public safety, pub- 
lic transportation, recreation, and 
social services. 

Eligibility: States, general units of 
local government (counties, town- 
ships, municipalities), Indian tribal 
governments, and Alaskan native 

Comments: Nongovernmental 
agencies and private organizations 
such as preservation groups may 
request and receive General Reve- 
nue Sharing funds from state and/or 
local governments if their financial 
laws permit such transfers of funds. 
The federal government has no spe- 
cific authority to designate the dis- 

tribution or allocation of such funds 
and preservation projects, including 
projects for reusing rail stations, 
must compete for a share of these 
funds along with other state and 
local agencies. Of the $30.2 billion 
authorized for distribution over a 
five-year period under the State and 
Local Assistance Act of 1972, very 
little has, to date, been allocated to 
preservation activities. It seems re- 
alistic, albeit unfortunate, to assume 
that even less federal money will be 
allocated to preservation activities 
than had been available under the 
various federal categorical grant 
programs which Revenue Sharing 
has replaced. 

At the same time, Seattle has re- 
served $600,000 of the city's General 
Revenue Sharing funds for the es- 
tablishment of an historic preserva- 
tion revolving fund. The fund is man- 
aged by the semi-autonomous pub- 
lic agency, the Historic Seattle 
Preservation and Development Au- 
thority, which has used the funds 
primarily for restoring historic prop- 
erties in the Pioneer Square Historic 

Contact: Office of Revenue Shar- 
ing, Intergovernmental Relations Di- 
vision, 1900 Pennsylvania Avenue, 
N.W., Washington, D.C. 20226 

General Services 

GSA is, like Amtrak, a major poten- 
tial force in the adaptive reuse of 
railroad stations of any category by 
virtue of its capability to lease space 
in such stations for the use of fed- 
eral office space. GSA cannot make 
funds available for the restoration or 
rehabilitation of a station which is 
to be converted to office space but, 
by virtue of its commitment to lease 
space, potential developers are in a 

better position to finance their own 
efforts to rehabilitate stations (or, 
for that matter, any historic property 
in which GSA is prepared to lease 
space). GSA is somewhat con- 
strained by the fact that it serves as 
the agent for federal agencies and 
any space which it is prepared to 
lease must meet the requirements 
(or must be capable of being reha- 
bilitated and adapted in order to 
meet the requirements) of federal 
agency tenants. 

The National Trust 

for Historic Preservation 

The National Trust is not a federal 
program but its programs can serve 
as an adjunct to Federal programs 
and can give guidance as to the 
best way to use that funding which 
is available under federal programs. 
In many cases the National Trust, 
better than any other group, can aid 
conservation efforts including those 
that relate to the adaptive use of 
railroad stations through providing 
advice, aid, comfort, guidance and 
the benefit of its own experience 
and that of others with similar or 
related objectives. 

The Trust provides professional 
advice on conservation problems 
through its Department of Field Ser- 
vices. In addition, its departments 
can provide professional expertise 
relating to historic property pro- 
grams and activities: Administra- 
tion, Architecture (historical and 
restoration), Career Counseling, 
Decorative Arts Curatorship, Fund 
Raising, Historical Building Sur- 
veys, Horticulture, LegalTechniques 
of Preservation, Logistical Confer- 
ence Coordination, Museology, 
Planning, Property Interpretation, 
Property Management, Public Rela- 
tions, and Publications. In addition, 
the Trust's Department of Field Ser- 


vices provides two financial assis- 
tance programs, Consultant Ser- 
vice grants for matching funds to 
assist in securing tlie services of 
qualified professional consultants 
on preservation problems such as 
those that relate to rail station re- 
use. And, the National Historic Pres- 
ervation Fund assists nonprofit 
Trust member organizations in their 
preservation activities including for 
example, stations, in the establish- 
ment and operation of local revolv- 
ing funds. The Trust conducts con- 
ferences, regional worl<shops, meet- 
ings and seminars on specific pres- 
ervation issues such as preserva- 
tions laws, building codes, historic 
district and building crafts. 

The Trust serves as a central mech- 
anism for the collection and dissem- 
ination of information relating to the 
broadest range of conservation ac- 
ivities, public and private, for profit 
and nonprofit, and at every level of 

The Trust is now preparing A Guide 
to Federal Preservation Programs, 
a 400 page study which is sched- 
uled for publication later this year. 
It should be of great assistance to 
those historic conservation inter- 
ests which are trying to involve the 
federal government — financially — 
in their efforts to preserve historic 
structures including, of course, rail- 
road stations. 




Reusing Railroad Stations Book Two 
is one of several publications pre- 
pared by EFL with support from the 
Architecture + Environmental Arts 
Program, National Endowment for 
the Arts. These include: 

Reusing Railroad Stations Reports 
the plight of abandoned stations and 
the rich architectural and civic herit- 
age they represent. It advocates 
their reuse for combined public and 
commercial purposes, including 
arts and educational centers, trans- 
portation hubs, and focal points for 
downtown renewal. Extensively il- 
lustrated. (1974) $4.00 

Tlie Place of the Arts in New Towns 

Reviews approaches and experi- 
ences for developing arts programs 
and facilities in new towns and es- 
tablished communities. Gives in- 
sights and models for the support of 
the arts, including the role of the 
arts advocate, the use of existing 
space, and financing. (1973) $3.00 

Hands-On Museums: Partners in 
Learning Provides case studies of 
fourteen museums that cater espe- 
cially to youth by providing pro- 
grams and facilities which involve 
visitors as participants in learning. 
Also reviews the impact of this phil- 
osophy on planning, staffing, and 
constituencies. (1975) $3.00 

Arts and the Handicapped: An Issue 
of Access Gives over 150 examples 
of how arts programs and facilities 
have been made accessible to the 
handicapped. A great variety of pro- 
grams are included, from tactile 
museums to halls for performing 
arts, and for all types of handi- 
capped. (1975) $4.00 

The Arts in Found Places An exten- 
sive review of where and how the 
arts are finding homes in recycled 
buildings, and in the process often 
upgrade urban centers and neigh- 
borhoods. Over 200 examples, with 

special emphasis on "do's and 
don'ts." (Publication Winter, 1975) 

New Places for the Arts: A Cata- 
logue of Examples Provides de- 
scriptions of about 100 museums, 
performing arts centers, theaters, 
visual arts centers, and multi-use 
centers built especially for these 
purposes. Includes listings of the 
various professional consultants in- 
volved. (Publication Winter, 1975) 

A special issue of EFL's newsletter 
Schoolhouse describes how schools 
are sharing space with the perform- 
ing arts community to the mutual 
benefit and betterment of both. (Sep- 
tember 1975; free of charge.) 

For additional information, and to 
order reports, write to: 

Educational Facilities Laboratories 

850 Third Avenue, New York, N.Y. 

All orders must be prepaid. Make 
checks payable to Educational Fa- 
cilities Laboratories, Inc. Orders of 
ten or more copies of one report re- 
ceive 25% discount. No returns. 


Photography by: 

Robert Pettus, pp. 4, 24, 25, 30, 32, 

Peter Green, pp. 7, 8, 19 

Michael Ross, pp. 23, 38, 40 

Robert Perron, p. 8 

William Edmond Barrett, p. 9, 
photo 1 

Ken Huston, p. 9, photo 2 

George Cserna®, p. 9, photo 3 

Mary Melander, p. 11 

Courtesy of St. Louis County Herit- 
age & Arts Center, p. 13 

James Garrison, Courtesy of Ari- 
zona State Parks Board, p. 15 

Courtesy of Woodbine Development 
Corporation, p. 21 

Courtesy of National Museum of 
Transport, p. 25, photo 2 

Stephen Harby, p. 26 

Courtesy of Union Station Associ- 
ates, p. 40, photo 2 

Courtesy of Anderson Notter Asso- 
ciates, p. 27 

Daniel Mann Johnson & Menden- 
hall, p.23 

Anderson Notter Associates, p. 27 

Union Station Associates, p. 44, 45 

Browning-Day-Pollak Associates, 
Inc., p. 45 top 

Drawings courtesy of: 

Gunn & Meyerhoff, p. 7 

Maryland Institute, College of Art, 
p. 10 

James S. Liberty and Associates, 
p. 15 

Melander Kaple Melander, p. 12 top; 
p. 12 bottom, new building 

Architectural Resources, Inc., p. 12, 
bottom, old building 

Naramore Bain Brady & Johnson, 
p. 19 

Graphic Design: Michel Goldberg